The closer your strings are to your pickups, the hotter the signal sent from your bass will be, and the greater the magnetic pull on the strings will be(less sustain, possible negative tonal results). Tonally it can sound more compressed(gainey?) with stronger low/low-mid emphasis as you raise them closer to the strings. Experiment and find the right balance for your playing, there is no right or wrong.
I find that when I have my action set too high it is hard to get the attack that I sometimes want to get out of my notes, and when it is set to low some notes lose their ability to "bloom" in the lower frequencies even though my basses don't normally have any fret buzz(I like being able to get some when I dig in).
YMMV, this is all my personal experience and I have been awake for 3 days