Do you mean that you want the missile to explode above the target and not with direct impact or just plain proximity? If it is the case, play with Z-offset parameter (not cruise altitude), it is altitude, positive or negative, relative to target's position where the missile will aim at. Lets say you setup this value to 5, so the missile will keep aiming 5m above the target, then your range to explode should be set to 6 ot 7m. Of course this also depends on the trajectory of the missile in the final aproach, if the missile is diving over the target and fast > 400m/s, then the missile probably will hit the target directly or will explode closer than 6m, not just 5m above it.
To tune up your settings, try with a larger Z-offset, for example 10m, and a boom-range of 14m. Anyway, might be I've missunderstood what you are trying to do.
About warheads, you may create your own ones, they are just scripts. You may copy/rename a existing warhead, modify at will, and provide your script name to the warhead parameter of the missile. And yes, you may delay the final detonation at will, in fact you may create as many detonations as you want around the last "alive" position of the missile (this effect is already done with the SCUD warhead).