The ideal hit-position will always be on the same plane, won't it? If so, I would do a custom line-plane intersection to find the hit position instead of doing an actual c_trace. This should also be much more efficient, since it's just tracing against one infinite plane.

On a big screens it can be easy to miss enemies when I lose track of exactly where on-screen the player is. A laser-line or a line that's attached to the cursor and points towards the player but quickly fades out might be really helpful in this regard, so the player can always tell what direction the player is from the aiming cursor.

Either way, keep it up. I noticed the camera glitch but forgot to say anything as I was really enjoying myself anyway