I'm afraid this is one of those questions where the honest answer is "it depends". It depends on the instrument, the player, the room you're in and what you're trying to achieve.
Personally, I tend to use the close mic technique primarily for live work where I need the gain before feedback. Soundwise, I generally find this position a bit "screechy" and requiring a fair bit of EQ to tame. Trouble is, one person's screechy is another's "clearer and lively".
For recording, I'd much rather use a more distant mic above the violin, generally poking in over the violinists shoulder. To me, this gives a more neutral, natural sound--still plenty of clarity but just more balanced.
The decision is made more difficult by the huge variations between different instruments and players. The violin is on instrument where I tend to have to experiment and listen every time I place a mic--very small moves can make huge differences in the sound quality. I'd recommend a lot of "try it and see" time.
