I think it depends on the level of play.
Passive defence and waiting for errors may be ok for lower rated players but among stronger players it is essential to fight for active play, even if it costs some material.
Stronger players don't make many errors (in particular in good positions) and know how to convert an advantage. The downside is that stronger players also know how to suppress counterplay and will try to force you into passive defence but it doesn't mean that you shouldn't try.
My default position is to shed material for activity, but sometimes I see stronger players hunker down and find a fortress. I guess you have to be skilled enough to find the fortress before you go for it, but it impresses me. (because as you said, if there's no fortress, and you're just passive, then you're more or less dead).
edit... or I should say... try to find a fortress... because their position is worse. This sort of grim defense in a way take more guts than the active play.
If you have a fortress, how can you have an inferior position?
Players finding a fortress in a seemlungly bad position display superior judgment. This leads a bit away from your original question.
You're right, my error.
The consensus amongst strong players seems to be to play practical moves that may not even be the "strongest" by engine evaluations, but give your opponents a bigger chance of slipping up.
In my opinion, if I am losing and there is no way to salvage the game (eg. if the only way to save the game is by hoping for mistakes that your opponent isn't likely to make), then I have nothing to lose. I would complicate the board, sacrifice materials for dynamic advantage, and attack like the great Mikhail Tal. Even if my last heroic attempt to turn the board fails miserably, it is worth the shot since I will still lose the game anyway. I figure I may as well fail with glory. LOL
against someone rating wise weak (1000 or below) wait and be tenacious
against a amature seek to complicate things in anyway (preferably tactically)
against a expert or pro etc... swindle SWIndle SWINDLE ! lol honestly idk good question.
I like that mantra for trying to find a balance between passive defense and suicidal attack... you're simply trying to pose problems. Thanks.
I know what you mean about pushing your calculation and trying to be creative. I'm at my most creative when I'm losing... not that I find better moves necessarily, but I'm definitely more open to all sorts of possibilities :)
I agree with most of the comments here, but I think there is a simpler more general idea that should be mentioned -- just try to find really good moves. I say this because it is natural to lose hope in bad positions, but think of it this way: If you play like houdini, you might still have a position losing by force, but your defense will be so stubborn that you'd save the game, or have a chance to save the game, anyway. Obviously none of us are computers, but you should strive towards this ideal.
I just objectively look at my options, like any position, and objectively analyze it. Maybe variation A will lead to a position that's bad for me; variation B will lead to a position that's still bad, but is better than the previous variation because of x. No matter how ugly the position looks, I am satisfied if I continue to choose the best options because I'm doing the best I can.
I think being defensive is underrated -- sometimes it's just the best option. Frankly, I think strong defense is intimidating -- you give your opponent the feeling that no matter how bad the position is, you will not allow any of his attacking ideas to work -- it's frustrating to play against and can hurt your confidence after many moves of trying to break a tough wall -- it often seems as if it will never fall apart!
I think you should only play actively when it is at least decent -- I'm not saying it has to be the absolute best move, but it should be pretty decent. When you try a desperate idea just to be sharp, what you are basically doing is giving your opponent a test: Calculate this one tricky trap accurately, and you win. I don't know about you, but if I were on the better/winning side I would much prefer that over facing extremely tough defense, because endgames can be really nasty to grind, and could take hours of concentration and thought. And if one isn't good at the endgame, the other side can easily take over just based on having more experience. Chess becomes harder with less pieces -- those pawns queen a lot more often!
Tim Harding wrote a helpful chapter or two about it in his book for the intermediate types, mainly focussing on counterplay. More generally I would say give your opponent as much to think about as you can, whether it is counterplay, complicated lines or even surprising moves. The latter are less likely to work against upper-level players, but sometimes you have no other tricks.
One thing I did actually read in Elubas' post is about the tough defense tack, and I agree with that too. Sometimes it's best to let your opponent's attack fizzle against a good defense; they may even overreach and put themselves in a bad spot. Still, there needs to be some pressure or they will stroll leisurely to victory.
This isn't too ideal without specific positions, but oh well.
As a counter-point to you elubas I don't think the objectively best moves aren't always the way to go. It may take a dozen more moves but if the general method of victory is the same it won't matter much to the opponent. Remember I'm asking about clearly worse positions.
Although I do admire those who can sink back into a tough defense and in giving up activity for 20-30 (forever) moves successfully repel an attack. I've only done so a few times and I was proud of those games.
To be fair, defense doesn't have to be pure passivity -- you should certainly be looking for sharp counter-ideas when they are there. I'm just saying, a lot of times, the active move is just wrong, so be careful with them. After all, initiating tactics tends to favor the side with a better position.
I'm influenced a lot by houdini, and play it a lot, and that's what I think he would say, because that's how he plays 
. Just playing really strong moves tends to create counterplay almost automatically -- because I am a human, houdini turns around games all the time against me when I play it from a better starting position. That, to me, shows the power of objectively strong moves.
Oops, #15 edited again to that I'm actually disagreeing this time lol (it ate my post... actually it's the computer I'm using).
I don't go nuts with counterattacks, but I don't go into total defensive mode either... I try to find a balance. I lost a game today where I was worse and trying to hold on, and it occurred to me that it isn't always clear how far you should push one way or another.
In the game I tried a little bit too much for activity and as you more or less said, opening things up favors the superior side. I made a passed pawn by taking one of his... but in the end it just opened a file he used later on to attack me... obvious in analysis but it's difficult to know where to draw the line when you're in the game.
It gets easier with experience.
I think it needs to be considered that different time controls require different techniques for dealing with a worse position, as well as what phase of the game you are in. For example, in blitz where a worse position is reached in the endgame, defense seems like the only option due to the lack of pieces and time required to make a sound tactical counter attack.
However in a correspondence game the answer will always be to just play the best moves, as any inaccuracies will surely be punished.
Admit to yourself you are probably losing.
Look for a swindle, try to set up:
Then play to try and achieve that, even giving up material. Maybe not objectively best, but that's what I do. If I have no idea how to possibly save the game, I'd probably just resign.
Sometimes dropping a pawn or exchange or playing the opening poorly can be the best thing to happen to you during a game, provided the damage is not terminal, it will make you fight and look hard for any resources available.
Some players however just tend to cave in, I never understood this. Games were I thought I was dead lost, resignable almost, I plug into Houdini later, and its amazing the resources still available. Plus your opponent maybe overconfident, or playing it safe etc.
Try this experiment. Give Houdini the side supposedly "Lost" down material, positionally busted etc and try to win. You will see, its not so easy.
Yeah, I was amazed when I was playing OTB how 170+ (2000+ roughly) players seemed to be at their most resourceful when losing, even if they had been playing poorly until then. Of course that probably had a little bit to do with the belief in themselves they must have had from knowing they were playing against someone lower rated, but still...
Ok, this will depend on the position, but does anyone have any tips for how to play in a clearly worse position? A lot as been written about what to do with an advantage, or how to conduct yourself in an even position, but not much about how to play a worse position. Not dead lost, but where you're obviously worse.
For example do you give up on activity and defend, making it as hard as possible for them while you wait for a mistake? Or do you try to force activity, set traps, and hope for a blunder? I think Dvoretsky's Analytical Manual has a chapter on this, but I don't have the book.