Stopping a program using IF

Using Arduino Programming Questions
#1

Hey, i have been working on a "Console" of sort using the atmega328p, but i wanted to implement a sort of "Cartridge" and i wanted to use an IF statement to check for cartridge and ignore the current program.
It works like this:
No cartridge inserted: Play the default game
Cartridge detected while the default game is running: Keep playing the default game, communicate to the cartridge to not send any instructions
Cartridge detected after reboot: Play the game from the cartridge, communicate to the onboard atmega328p to not send any instructions.
I Wanted to use an 16x2 LCD, and to connect it to the atmega328p AND the cartridge port.

I used digital pin 3 to sense if the cartridge is in using this code inside the void setup():

//some code, not important.
  pinMode(3, INPUT);
  btn = digitalRead(3);
  if (btn == HIGH)
  {
    while(1) {}
  }
//the actual game code

I have no idea why, but it just goes right into the actual game code.
I do use the arduino bootloader, if it's important.

#2

Does it behave in the same manner if you first hold the button in, then while the button is still held in, reset the arduino while still keeping the button held in ?

#3

I don't have a button, but a jumper cable connected to either 5V or GND.
All i have tried, is having the jumper wire connected to GND (low), turning the atmega328p off, switching the jumper cable on to 5V (high) and turning the atmega328p on, and the reverse.
It always goes to the program code, BUT sometimes, when i power it on, the LCD stays in it's default state, no matter if the pin is high, or low.

#4