The option at the game setup is just there to allow you to choose whether or not to enable it for those players (i.e., in co-op) that have already bought it.
You will need to complete all 4 campaigns at least once to unlock the ability to purchase infinite ammo for your weapons. You will have to buy infinite ammo for each weapon separately.
The costs for each weapon are as follows:
Handgun: 79,000 skill points
Shotgun: 89,000 skill points
Magnum: 99,000 skill points
Sniper Rifle: 79,000 skill points
Machine Pistol: 89,000 skill points
Assault Rifle: 89,000 skill points
Grenade Launcher: 99,000 skill points
Crossbow: 79,000 skill points
Considering how difficult it is to unlock and obtain, I'm pretty sure it doesn't turn off achievements (RE5 did the same thing with infinite ammo). It's pretty balanced since infinite ammo has to take up one of your skills in your skill set, so you can only have infinite ammo for three types of weapons.
I share your pain regarding the lack of a manual, or in-game guide! Having to learn all the controls by trial and error (with no real break in the action) is very frustrating. :(
Infinite ammo will probably be done like in 5; that is, once you unlock infinite ammo, you will have the option of turning it on or off...but you have to get the ability first.
Attack reaction is probably whether or not your partner reacts (stumbles, trips, etc.) if you hit them with your own attacks. They probably won't take damage, but hitting or shooting them will throw them off a little. Again, like in 5.
"Agent Hunt" is one of the new minigames (like The Mercenaries), and I have no idea about it yet.
Best Answer
You need to complete all 4 campaigns in order to unlock the ability to purchase it.
You get it as a skill for each individual weapon type. You can only have 3 skills equipped at anytime and each weapon type costs a significant amount of skill points (prices start at 79k and go up to 99k).
Purchasing and using them does not affect your ability to gain achievements.