1. i have never noticed the "ineffective" icon, but different weapons (ke, ce, te) have resistances based on the armor the enemy has. for example if you are fighting a mech with high KE resistance, a KE weapon will do very little damage.
2. the gatling guns are great in story mode. not too sure about MP b/c i don't play it very much. the USG-23/H absolutely destroys weaker enemies and ac's that have weak KE resistance
Seriously 1, 2, & 3 !!!