I don't use rep points for stories -- only in the forum. The exception to this is for a new author, like Cia said. Basically, beyond the first 100 rep points, they become pointless IMO. Unfortunately, people who are new here think that the more rep points you have the better an author you are (I've seen this confusion in comments/reviews, forum posts, and messages).
The fact is, some popular items are not necessarily the greatest literary works. That's life. There are people who really and truly believe that Harry Potter or Twilight are the greatest things since sliced bread ... and yet the great 'classics' many people find horribly boring. It's all opinion.
I used to like the star rating, but that, too, becomes pointless if the only rating ever given is 5 out of 5 stars, and it can be awkward to use rate with those because they're just not obvious at first glance). To really make the stars useful, they should be incorporated into the review system -- you leave a review and have an option to rate with the stars -- like they do reviews on sites like Barnes and Noble and Amazon. That way the stars have meaning based on the context of the review.
What would be really interesting would be if the number of reviews could be used the way that the rep points are now ... hm.
As far as feedback goes, the only really meaningful way to do that is through reviews or posting in that story's forum topic. I wish I could say I was better at this, but I hate reviews that simply summarize or just say "it's great" and often that's all I can think of. That, and I don't review stories I don't like. I don't neg rep them, either. I think that would be a misuse of the system.