What pad/product you use is going to depend on how bad the paint is. If theres no real problem areas, simply using ssr1 on a white (polishing) pad would be sufficient. If you feel as though it needs some slight correction, ssr2 or 2.5 would be your next step. ssr3 really isnt required that often from my experience. If stepping up to a stronger polish, I'd also jump up to an orange polishing/light cut pad. You can first pair this pad w/ a lighter polish to see if it does the correction you're after before moving to the stronger polish.
Concerning the mf bonnets. I dont think they'll provide enough bite or cut for what you want to do. I would really stick w/ some foam pads. And if you have a dual action / random orbital buffer already, I'd say start there. They're safe machines to use and foam pads are certainly available for those as well.
I typically dont tape off any areas of the car aside from trim or badges. Especially if working w/ a DA, there isnt really enough heat generated to burn through your paint. You might consider some smaller 4" pads though. They fit in to tight areas better than the larger pads, making life much easier