I usually set NPCs to 0.7 or more, city size to 5, city spacing to 3. Almost all my worlds have hordes enabled, with a spawn rate of 1.2, and an item spawn rate of 1.1. It gives a nice challenge without being overwhelming, and the item spawn rate is high enough to feel reasonable. I’ll usually hand edit my save file to reduce the item spawn rate over time, to represent stuff decaying/getting scavenged by other people.
My basic kit is crossbow or bow and small quiver, melee weapon (in a scabbard if possible), knife for butchering in the boots, 2 first aid kits, a bottle of disinfectant, some aspirin, 4 improvised lockpicks, a light source, and a crowbar/halligan bar[1] on a firefighter’s belt if possible. I’ll carry a gas mask or survivor mask but only wear it when I spot boomers or smokers.
I don’t carry sewing kits or toolboxes on me regularly. I leave them, and the welding gear, in the mini-deathmobile of the moment. The library stays at home. I usually have a couple of duffel bags in the deathmobile for moving loot, but I don’t wear them except briefly in safe areas while transferring stuff from one point to another.
By midgame, I wear a survivor suit, survivor rig, and survivor pack for storage in the field.