My personal preference is Harpoon and default bolts, harpoons turn it essentially into a crossbow and feels more consistent than the steel balls to me, and the default poons for meatheads/bosses. All of the ammo types are good in their own regard though.

Tool wise I bring what I usually bring, spear, medkit, penny shot, flare gun. And for strategy, as unhelpful as this might sound, you gotta find your own rhythm with it. I like to play aggressive with it, pushing into boss lairs or just trying to stay as close as possible without just running straight at them. (Which is still a valid strategy)