Experienced Difficulty, Vanilla (or Stracciatella, which is just Vanilla with bugfixes AFAIK) for your first playthrough. Sci-fi mode, as you may as well experience the extra content before dismissing it (and it's interesting, even if not the best segment of the game). Tons of Guns shouldn't be too bad for a Vanilla/Stracciatella playthrough, but if/when you migrate to 1.13 you may want to disable it (see below).
After your first playthrough, try 1.13. It adds so much to the game, particularly the new inventory, interrupt and trait systems. It fixes loads of annoying things about the original game, like randomnly getting permanent statloss with no way to recover from it. It's absolutely full of gun porn though, to a ridiculous extent, and IIRC disabling Tons of Guns doesn't even make that much of a dent in it. It's a little overwhelming at first but you'll soon adjust.
A few of the better mercs to hire for a first-timer: Raven, Buzz, Thor, Barry, and Igor. After your first game, you'll probably want to experiment with some of the others. Unfortunately, merc balance is one of the weaker points - there are some that are just plain better, and others that basically amount to a challenge run. Still, they've all got their own personality and a bunch of funny lines, and the VA is great, so you can't really go too far wrong so long as you remember to take a decent medic.
Prepare for the best game you'll ever play in your life. And keep an eye out for a cameo by a certain 'thal codexer.
EDIT: Forgot to talk about the saving options.
For vanilla, don't choose Ironman, because A) it's insufficient and B) The game sometimes crashes or permanently hangs on enemy turns. Stracciatella probably fixes this, I don't know. 1.13 generally does, depending on the version you go for, but it's still worth saving frequently to be safe. If you want to limit yourself, enforce it yourself, and just use the in-combat saves as a guard against crashing.
What I mean by insufficient is that the option just stops you saving and reloading in combat, which is a restriction designed for puny babies. Once you've done a few successful playthroughs and you've earned yourself a pair of real testicles, try a 'real' Ironman run where you never reload to avoid your mistakes or misfortune - at all. You'll have to enforce it yourself, obviously. Not worth attempting until you have enough experience with the game to win difficult combats, but it adds a sense of high-stakes tension that can't be matched anywhere.