SETUP > ENVIROMENT > Arena Settings: Find "PlaneGunAmmoMult" on the list and set it to 100,000 (Yes, i know it says its not in possible range, but works anyway). This will give you unlimited (OOR - out of range) ammo.
Joystick Settings: I would say they largely depend on personal preference, but also on stick type and on to a certain extend even on the plane types you regularly fly (some have more nose bounce issues then others).
Me personally, i like very fine control (i have almost all sliders maxed out and damping/deadband to a minimum), but its also very touchy/bouncy.
If you have trouble with nose bounce, id try lowering the sliders (see Mustaines settings) and adding a little damping on RUDDER and PITCH axis. ROLL doesnt affect nose stability that much.
As a general rule for ALL axis id keep the Dead Band to a minimum. As little as possible, as much as necessary (ie "flatlines" in the blue box ie no spiking).