I'd like to preface this post by saying my thoughts are not altogether as clear as they might be on this matter. It also assumes the teacher is in a traditional classroom setting and tries to project how that teacher should behave given that setting. It does not debate the merit of traditional settings vs. other kinds.
When I taught high school, I once had a discussion with the vice-principal that was part of a routine class observation. In this discussion, she said that students will show classroom etiquette if they believe the teacher is "on their side," "wants them to succeed," and believes in their "potential." The supervisor made reference to a teacher at the same school who goes to class with her high school pom poms and cheers at right answers. While I think this would help underrested students wake up, this suggests to me that students are supposed to do well to please the teacher, and not for their own rewards. Of course, me doing this, even with a male cheerleader outfit, would not be a pretty sight.)
This discussion helped me to locate where my disagreement is with the majority of teachers I meet today as well as reasons for not liking many of my teachers growing up. Let me address point by point.
I believe teachers should be on the students side when the students are doing what well, but opposed to the students when they are doing something they should not be doing. Different students behave differently, and so a good teacher is on different students' side to varying degrees. The teacher should want all of their students to behave well and get good grades, but not "like" or "approve" of all students equally. Nothing is more unfair than treating all students equally; it degrades good students for teachers to lavish equal praise on the genius and the troublemaker. Why should any student behave if the teacher will make it equally easy to misbehave, or if the teacher simply says "I'm okay, you're okay, let's all be friends," or if the teachers is going to start every day saying "let's forget all of the misdeeds you committed yesterday and start anew"? This is comparable to telling every basketball player he's material for the Boston Celtics, every poet that he's W.H. Auden, or every drug dealer that he has the best dimebags in town. I'd even go so far as to say that the majority of students cannot be "above average."
Many of my high school teachers really annoyed me by seemingly believing that all people were basically good, kind, and hardworking - even kids bullies and students who cheated. I liked it when teachers took a stand against students like that. All of my teachers growing up were against the death penalty not because it was giving govt too much power, or because some innocent people were put to death, but because all people were basically good. I did not want to go into teaching telling students that life is a big rock candy mountain or that everyone is equal. I wanted to give students the opportunity I never had, which was to have a fair teacher.
There is a countervailing consideration. That is, that most people underestimate their own abilities. By believing in students more than they believe in themselves, they can nourish these abilities, and still have a realistic grasp on reality. However, this needs to be weighed against the need to be fair to students who have already proven themselves. With students are conducting themselves improperly, it also needs to be weighed against the need to make it clear that their past conduct is unacceptable.
Students at my school did what they can get away with. For example, one teacher with no classroom management skills had half the class ask to go to the bathroom (they really went to lunch). Students justified it by saying "everyone else was doing it." If teachers don't punish tardiness or uniform violations, students come to class late and out of uniform.
I don't believe you should cheer as loud as you possibly can for an okay answer when you've heard much better. You should be correspondingly less enthusiastic. I know some students put 15 hours a week into their homework and others who put none. These students should not be treated the same. Students who are nasty should be perceived as nasty by good teachers. I wasn't concerned with students who drink, have sex, do drugs, smoke, listen to heavy metal, swear, or cut school. I think students are nasty when they're interrupting the flow of the class, denying reality, blaming the teacher for their own poor performance on multiple guess open notes quiz, or asking for something they haven't earned.
Let's not raise kids to be moochers and looters by showering them with undue affection.