HW % is fine, as is anything under a few %. Diff isn't an issue on S3s, and best share has never worked.
There definitely is a correlation between HW % and rejects. Furthermore, rejects reduce shares thus rewards if you are mining on a pool, and if solo mining redue your chances of solving the block even further.
Best share does not work on some pools (e.g ghash) , but works on others (e.g slush), so it is incorrect to say it has never worked, more like it does not work on your pool.
EDIT:Diff settings can help improve rewards when mining on a pool in the very short run, so it may be fair to say it is not an issue on S3's, but that depends on the pool you are mining on. Some pools take an age to set a var diff thus costing you rewards, while others are quick. Also, intermitent connections can result in the pool setting a low diff that reduces rewards, so there is no harm in setting a minimum diff for the S3 at the onset. In any case, if the pool detects the rig is hashing at a higher diff than you've set, it will adjust it accordingly.
END EDIT:PS. If you are not sure of the answer, do not clog the thread with waffle.