That is EXACTLY what 'Feed Hold' does. The 'stop' button is for when you need things to stop now no matters what. Because of the way Mach works you may see a bit of a delay with a Feed Hold, if you are in a subroutine or a custom M code it will finish those things, generally, before coming to a halt. The SmoothStepper plugin can take over the feed hold if you tell it to. The SmoothStepper just slows down how fast it consumes data from Mach and brings the machine to a controlled halt.
The Mach manual does a great job of explaining how Mach works, it is essential that you understand how it works before you try to go about changing things. It will save you much time and frustration to have a peek at the manual.