I am 100% with you on the annoyance factor with the taskbar overlaying various application windows. Insanity!
Like you experienced, my task bar would not stay hidden. Through trial and error I figured out that the taskbar would hide if I unclicked the option "show flashing on taskbar apps" option in the settings (it is just one setting away from the non-functional "automatically hide taskbar option").
I think that the folks that develop Windows need to stop thinking about adding crazy options in its settings and focus their attention on fixing the problems that prevent you from being able to do basic things like interact with applications.