Different barbell positions have different advantages. Either way, you shouldn't have to do heavy work with your arms or hands to keep the barbell in place.
Don't keep the barbell on your spine/neck, in a high bar position, it should be just below the neck, in a low bar position, it should be on your shoulders, keep your hands on the bar to make sure your shoulders go back enough to create a shelf for the bar.
High bar squats will be more quad focused, low bar squats will let you use heavier weight, but it's harder to keep a straight back so that you don't do "squat mornings" low bar squats use your hip more.
If you're unable to find a comfortable position for the barbell, try using one of those cylindrical pads or do front squats! Also keep working on your back and shoulders, its more comfortable if you have a muscular area to put the bar on.