We find it is very helpful to come out of Illustrator as a normalized PDF. With Normalized PDF you get all the extra XMP information that PackEdge can take advantage of (barcodes, inks, layers, named objects etc....) My guess is that PackEdge will open a NPDF with better results then a .ai file.
As far as settings go. We embed all images, outline fonts, Expand patterns and convert blended objects to images