I have tons of apps as we had the app store gift card from the BTS promotion last year at Apple. I use the following two on a daily basis for PDF annotation.
Notability for the kids - visually appealing for the kids and I like the organization levels - $2.99 right now, used to be $ .99
PDF Expert for me - ability to quickly to organize, merge, delete, split documents (a bit boring in appearance) - $9.99 normal price, sometimes goes on sale for $4.99
I have also tried and deleted iAnnotate, Goodreader (good but too cluttered), and Penultimate (poor).
As for stylus - I have tried the Targus and Boxwave. I like the mesh fiber for the Boxwave.
Edited: Autocorrect!