I think my VCore caps at 1.25V. Should I increase it to 1.25V from the start and then start pushing the multiplier? Also, does increasing HT Clock over multiplier affect temperatures differently?
Set your Vcore manually from the beginning. If left on auto, the motherboard will increase the voltage automatically, often more than it needs to.
The default Vcore is 1.25V or so, like you thought.
You'll have to see if raising the HT clock has any worthwhile affects on performance, it's probably more beneficial to raise the multi 'till you hit a wall, then increase the HT clock to get those last few MHz.
35c-40c is very safe, you can go way over that, don't worry about it.
Use Prime95 small FFTs to stress test.