Saddle adjustment for clipless?

When my husband fixed my bike for me, he gave me some toe clip pedals which didn't work for me at all. We changed them out for some $6 platform pedals so that I could get used to riding again before trying the more challenging stuff.

I've put quite a few miles on the bike, and the pedals are already thrashed. I'm going to be investing in clipless soon. However, here's my problem. I have found that when I ride, the pedals rest in the center of my feet where the arch is. When I try to ride with the ball of my feet on the pedals, the top of my thighs start to kill me and I feel like my knees are coming up too high. But when I ride with the pedals in the center, I have no problem with cadence or stress at all on my legs or the top of my knees.

Does this mean that I should adjust my seat to be up a bit when I get some clipless pedals? I'm hesitant to do that because I tend to ride a lot holding the handlebars by the fingertips because it's more comfortable riding where I'm sitting up more. (We're going to get a pair of riser handlebars soon). I don't want to be even more uncomfortable with my butt higher than my hands. On the other hand, I don't want to do damage to my knees or thighs.

Thanks for your help!

Changing pedals almost always requires a change in saddle height. By putting the arch of your foot on the pedal, you are accomodating the low saddle. Once you have the ball of your foot on the pedal you effectively lengthen your leg length because of the position of your foot. You may also "ankle" when the ball of your foot is on the pedal (heel is higher than the toe). You may want to raise the saddle now so that you can keep the ball of your foot on the pedal.

You'll have to go through this same exercise with the new pedals.

Regarding the bar height, would a shorter stem or a stem with a higher rise also help (or instead of the bars) ?