I didn't think about that having the insulted rail start right at the signal. For some reason I always thought that the signal switched as it entered the block but that the signal wasn't right in line with the edge of the block. I could move the signal to the left that would be no problem. I'm going to extend it too so that it doesn't turn red right away too. But I have some other track work to do first before I do that.
And yes, I just used an insulted rail for the activation. Lionel made insulted sections of track for this but I didn't have any except for a few pieces that I noticed were cut underneath to make the rail insulated. Maybe sometime I will post what I did incase someone runs into that problem with Super O.