I use Grade 5 bolts for sheer pins. I don't know what a Grade 2 bolt is. I never heard of that before.
I have a 9 inch auger and a 12 inch auger. I use the 12 inch for everything. When installing fence posts, it's almost impossible to keep the holes straight for every posts. With a 12 inch hole, you will still need to have a clam shell digger to adjust the hole on one of the sides.
The 9 inch just buries itself in the ground. My 37 hp tractor doesn't have enough up lift to stop the auger from drilling down to quickly. I haven't used it in years and I can't think of any reason to keep it, other then it's paid for and not in the way of anything.
I use mixed concrete on my corner and gate posts. Mixing it allows the concrete to get as strong as possible. For line posts, I usually back fill the clay that came out of the hole and pack it with the end of the handle on the shovel. If I'm going a long distance, I'll fill the hole with dry concrete and pour in a little water.
Most important on every post is to create a lip around the bottom of the post so water drains away from it. Every post that rots, will start rotting away at ground level. Water settles there and remains wet for long periods of time. Six inches down, and the post is still solid. Force the water to go away from the post and it will last a very long time.