Tough call Lotus, the skull on the back completes the figure in my eyes, however having him hold it displays it front and center. And the skull does look too cool to hide behind his back!
I'll probably have mine with the skull on his back, but I'd suggest you have him hold it. You could also wrap it around his back at a later date by removing the original string, replace with a new string, and then tie it around the torso.
The paint issue is a big one for me, I really don't like the mask on this one and prefer to not have it on his head. I suppose it's no different then figures we get from Sideshow, but at this price point, I'm expecting higher quality.
Still, I bet the head would be greatly improved with a little bit of black around his eyes. Easy enough fix for even a novice to do.