You can put weapon duties in AI mode (they call it Battlewagon mode) and you just handle the driving. I think it's hotkey 1.
The game recommends playing the story mode first, but I learned a lot more about the game through sandbox mode.
Threat level is a big deal, and it's a combination of your combat skills and bonuses, and also the equipment on your ship and its overall condition.
One thing I noticed: the best equipment seems to be found within the largest factions. Early in the game, figure out which faction is largest and try to buy your stuff from them. Costs more, but resources aren't that difficult to acquire and you'll find much stronger (more stars) equipment with the larger factions. I think the story advances with either your personal level or your threat level (and also completing story missions), so you can purposefully remain weak for a while in order to explore the galaxy and trade with factions without advancing the story. This works in sandbox mode, too.
Your smaller ships make a huge difference in combat, and the enemy has the same capability. The small craft can take out your shields fairly quickly, so I like to scoot away from the big ships and take out as many of the small ones as possible right away. Whenever I level up and get the option for more command points, I take them. This allows for more and larger ships in your hangar.
When, at level-up, the option for more command points is not made available, I favor the choices for speed, maneuverability, and boost. Eventually you'll max out the standard level-up bonuses, at which point the increments become much smaller. For instance, instead of getting 8 command points you'll only be offered 2. Ditto the rest of the level-up bonuses. By this point you'll be quite powerful, tho, so it's not a big deal.
Speed and maneuverability make combat much easier, since you can use them to separate yourself from the pack and pick off the enemy in smaller groups. Likewise, I tend to go with the beam weapons that have a bit longer range. The standard ones are in the 120-250 range, while some go up to 400-600. This will allow you to do damage while staying outside of the range of shield-killing lasers and such. Missiles are okay but my preference is for the pew pew stuff.
Don't forget that you can press the spacebar to double your shield strength temporarily. When I see a large salvo of incoming missiles, I'll press space for a couple seconds to deal with those pests. The larger missiles - torpedoes and the like - are best avoided with speed and maneuverability.
Keep in mind that your ship layout plays a large role in combat. While some designs can look cool, I found the basic rectangle to be the strongest since it gives your cores the most connection bonuses. A longer rectangle allows for larger wings - aiding maneuverability - while a wider rectangle gives more engine and nose space, generally boosting your speed and shields. I went with the long rectangle, and made sure the engines I used had the best speed bonuses. Made for a quick and nimble ship that still had a large load of weaponry while maximizing the core bonuses.
Note that there are 'power-ups' available in the combat mode, usually scattered inside the debris field. They don't boost your ship, but will replenish your shields, armor, or energy to their full level.
Combat does get old after a while, and doesn't seem quite as interesting as in the first game. Ship design is more flexible, though.
Faction stuff (you'll lead your own faction at some point) seems mostly there to generate income for you. In sandbox mode I fairly quickly got to the point where goons, rez, and scrap were a non-issue. Your faction is essentially a group of individuals who do their own thing for the most part, and you're not really giving orders to your faction mates. Mostly 'economic encouragement' of the bounty variety. You can specify a wingman, though, which can make a big difference in combat.
The game has been super-stable, and I haven't encountered a single glitch or bug. Surprising to encounter that these days. I like the game overall, with a preference for the first one.