Terraria – Do projectiles released by melee weapons deal melee, ranged or magic damage

To get the most damage out of your Megashark, you'll want to have the following:

• Unreal prefix on your Megashark (+15% damage)
• Hallowed Helmet (+15% ranged damage, +8% ranged critical)
• Adamantite Chestplate (+6% damage) or Shroomite Breastplate (+13% ranged critical)
• Hallowed Greaves (+7% damage)
• Menacing Ranger Emblem (+4% damage and +15% ranged damage)
• Menacing Avenger Emblem (+16% damage)
• Menacing Destroyer Emblem (+14% damage and +8% critical)
• Two more accessories with Menacing modifier (+4% damage per accessory, +8% damage total)

In total, this is +100% damage and +16% critical chance (with Adamantite) or +94% damage and +29% critical chance (with Shroomite).

You might, however, want to sacrifice some of this damage setup in order to have more survivability.

(The following info pertains to the PC version, though it may also pertain to the console version as well.)

The Warrior Emblem, Avenger Emblem, and Destroyer Emblem absolutely stack (quote taken from the Destroyer Emblem wiki page):

Note that the Destroyer Emblem, Avenger Emblem, and Warrior/Ranger/Sorcerer Emblem all can be equipped simultaneously for a stacking damage bonus.

These also stack with the fire gauntlet and mechanical glove. However, consider using the Celestial Stone in place of the mechanical glove, as several of the end-game class setups for melee builds use this accessory combination for maximum damage.

By the way, if you get the Menacing modifier on each accessory, it's an additional 4% damage per item! Combined with a Terra-Blade, you can rack up some ridiculous damage per hit.