Yeah, sure you did!
I tried to do long range salvos with HEs, and the damage is consistently higher - especially as I was able to light multiple fires (As you suggest). Unfortunately I'm struggling to hit citadels with APs even at low range. It does happen occasionally, but not as often as I'd like.
As for aiming at water line, I found that slightly above gives me better results, as because of the dispersion some of the shells will surely hit around water line, and less goes to waste. But again, I am still a noob.
BTW, I appear to be much more efficient with BBs than with smaller ships, at last I was able to actually do meaningful damage, once north of 60k with the Fuso. It is difficult to be consistent though, and it can be downright frustrating, when my long range salvos plunge right next to the target, sometimes a few shells behind and in front, and after multiple attempts.
The Furutaka is somehow a magnet for the opponents, probably because it is dangerous yet easy to sink...?
Anyway, the complexity of the mechanics is surprisingly high, which isnice, but the learning curve is certainly there.
Regarding to citadels - it's a very complex matter and I also struggle with it, but this is what I know:
Every ship has a different citadel and the citadels have different shapes. Some have flat tops, some have "cut edges" and every ship has a citadel of a different height over the waterline.
Therefore every ship needs a little different tactic if you want to citadel it.
With the ships with low citadel, you need to aim below the waterline from close reange where your shells have a flat trajectory. Sometimes it's easier to simply aim for the guns or the superstructure to do reliable damage rather than risking the shatters.
From longer range, you can't aim for the waterline, because if you do, the shells come from above and will simply ricochet or slide off the citadel armour. If you have high AP, you can aim for the superstructure and as the shells go down, they can penetrate the citadel from above.
With the ships that have the turtleback armour (the citadel isn't rectangular, but has slanted edges) it's really hard to penetrate the citadel, unless you shoot it below the waterline directly broadside or from afar by plunging fire. If you hit it at any other angle, it will bounce.
For example. US battleships are relatively easy to citadel broadside on from any distance when you aim for the waterline, because the citadel profile is rectangular and relatively high. German battleships, on the other hand, I am only able to citadel from a mid-range. Too close and you won't hit the citadel because it's very low. Too far and the plunging shells won't penetrate the thick and angled top of the citadel.
Cruisers are easier if you have big enough shells (If you play a BB), otherwise in Cruiser vs. Cruiser encounter, the above also applies. There are also special cases that make things more complicated. For example American and British cruisers have AP shells that bounce less (they can penetrate from steeper angles) than German or Japanese AP shells.
etc. etc.
It's really kind of a science behind this. Good players on Youtube make it look so easy but what they're really doing is that they subconsciously know where to hit every which ship in particular.
So if you're not good at this (I know I am not), there's always the possibility to play light cruisers and spam HE. Death by thousand cuts. But I really love American heavy cruisers. They are hard to play but when they hit, it bloody hell counts. (you can't heal back the AP damage)