insulation batts, top or bottom of joist?

First time on the site today. I've spent half the day looking through the forums, I am learning a ton! First time home owner, only been in the house a few months. There is a place in our upstairs ceiling where the drywall tape is pealing. I know I can take this tape off and repair with new but I am a little concerned about the cause. I'll post a picture of what it looks like. The huge mudding knife mark next to it leads me to be to think it's just poor quality work, but could there be another cause? Right about this ceiling is the attic, could an attic humidity issue cause this? I stuck an humidity meter up there. Over a week it registered 44% humidity as the high and 29% as the low. Of course this is winter in the north east so it registered a high temperature of 55º and a low of 40º. I plan to just replace the tape and patch but wanted to make sure. [ATTACH]45942[/ATTACH]

I'm planning on removing about half of the ceiling in the living room in my 1930's home to work on some electrical and install recessed lighting. The existing ceiling is plaster coated over gypsum lath board. A test cut shows that the gypsum base is about 5/16" thick and the plaster topcoat is about 5/16" thick. Since I don't want to demo the whole ceiling, I'm planning on cutting a straight line into the ceiling, and then I'll install new 5/8" dryawall butting up to the part I cut out. I have to make a 20' cut in a straight line to accomplish this. Are there any recommendations on how to make this cut? I thought a circular saw with a diamond masonry blade might work at cutting through the plaster, and I can finish the cut through the gypsum with a drywall hand knife. However, not sure how safe it would be to use an inverted circular saw. Any thoughts?