To crust, does the BC need to be thick?

You can thin it as much as you want, within reason, and it will crust if the ratio is correct.

for spreading on the cake it is easier if it is thinned out  just a little but for making flowers it is better to be thicker so your flowers will hold their shape. Dani 1081 is right that it should crust either way if made correctly.
 

What butter cream recipe do you use?

If you thin yours out it will probably go on the cake better but don't thin it out too much. You can just add extra liquid a little at a time and just see how it goes.

This is the recipe that I use below for butter cream.

2/3 cup shortening (I use Crisco in the blocks)

22 tablespoons butter

1/4 - 1/2 cup heavy cream (I start by using 1/4 cup first)

2 teaspoons vanilla extract

2 lbs powered 10X  Cane Sugar

1-2 tablespoons light corn syrup

I also heard that Indy Deb's butter cream is a good one to use also. I have not tried her recipe yet but one day I will.

Mix shortening and butter till well mixed. Add 1/4 cup heavy cream, 2 teaspoons vanilla and add powdered sugar slowly. I normally don't add the whole bag because to me it is too sweet putting the whole bag. I leave probably 1 cup (I am guessing out of it) 

I take enough out some for some borders and flowers because it is thicker. Then I will add maybe 1 tablespoon of light corn syrup since I took out a little for my borders and maybe just a little more cream just to make the rest to be able to cover the cake more easily. The smoother it is the easier it goes on the cake.

This is if I do a 2 layer  9 inch cake. If I do a bigger cake I normally will make one recipe and half the recipe. I always have some left over that I sometimes will make cupcakes or either I freeze it and take it out when I need it.
 

So just use all butter.  All butter tastes better anyway.  The type of fat you use doesn't matter, it's the ratio of fat to sugar that makes it crust. 
 

Word!  All-butter is the way to go! :-)