All of the above. You have to leave some room inside for the buds to move around, so air can get to all sides of them, or they may not dry uniformly. (IE don't pack them full).
In contrast, you don't want to put a really small volume of buds in a really big jar, because it will take a long time for the jar to build up to proper humidity levels, and your stuff may dry faster than it ought to. This isn't a problem if you're carefully measuring/controlling humidity, but most people don't. Try to keep the jar at least 1/4 full, if you can.