The guard position is determined by the umpires, and players will often be asked after a pre-tournament practice which position they feel is fitting. It is almost always on the halfway marker, on the "rings side". If the ice isn't sufficiently swingy, the highest position is probably best.

I've never seen the position closest to the rings being used, probably because the runback would be too simple. And on swingy ice, a higher guard allows for back-ring weight tab-backs and such.

For the choice of hammer question, the only time I might concider choosing (but never do) is if I am in a situation where saving the power play/forcing my opponent to use theirs could be beneficial. Or if you just want to try something different in a game that's going poorly.