Driving with the windows down up to 40-45 mph may be sufficiently cooling than needing the AC on.
Once over that speed though, the AC is more efficient as far as drop in mpg.
Sitting in stop-start/slow crawling traffic with the AC on, will see mpg drop quite considerably (7-8 mpg difference).
As for cooling down a hot car - windows all down for as long as you're not going over 40 then up and the AC on in recirculation mode. The interior air temp will be cooler and the AC has less work to bring it down.
Vent setting should be the upper vents, but not the windscreen, so as to prevent condensation forming.
AC, temperature irrelevant, should be used at least for 10-15 minutes per week to keep the oil moving and seals in good order.
Any whiffy smell that doesn't disappear inside the first minute or two of use, should be dealt with - you've mould growing on the evaporator.
And finally, the AC system should be checked at least every other year for leakage and sufficient pressurisation.
If before then, the air isn't chilly, you should get it checked out and re-pressurised to restore effective and efficient cooling.