I aim with analog sometimes, other times I'll use the face buttons. In the case of actual aiming it's usually better to go with analog technically. 8-way MOVEMENT with the dpad works very well, but 8-way AIMING is a bit restrictive (though not that much). But I'll sometimes pick one or the other at random. Dont know why. Either is viable in the end though.
As for the bit wit the PSP, yeah, I've done that too. Usually when playing Monster Hunter. It was a HUGE complaint with that stupid thing, because for games like that there's no other way at all to control both character and camera at the same time. The normal 3DS has the very same issue, and it's just as dumb on there. There's a reason why controllers have more than 1 analog stick, really....
When it comes to the spiders and such, the best advice is just "take it slow". This is important for most restrictive attack patterns. The faster you move in a game like this, the more likely you are to get hit. Make careful movements using the slowdown button, and stop moving entirely when needed. And remember that your hitbox is smaller than it looks (hit F7 if you want to see exactly where it is and how big). Enemies that have the ability to pierce walls, well, the reason it gives you trouble is indeed the entire reason they have that ability, heh.
As for the "all in the wrist" thing, I just.... what? I dont think Iv'e even seen that. It lets you break bombable walls by shooting them? Hm. That sounds a bit much to me, I"m not sure. It DEFINITELY sounds like it shouldnt appear early on, that's for sure.
Yeah, you'd think I'd know this stuff already, but that'd make too much sense.