Negotiate the Offer
TLDR: How much you negotiate or whether you negotiate at all is up to you.
Should you negotiate your offer and if so, how much should you negotiate?
Like many of the questions you have, the answer is, "It depends." It depends on how much wiggle room you gave yourself when you made the initial offer, it depends on how reasonable the seller is being, and it depends on how badly you want the house. Negotiating is often emotional–how much do you feel like coming to an agreement? Because of this, there is no right or wrong answer when it comes to negotiating with a seller.
Keep in mind that before you've signed the contract, your earnest money deposit is not at stake, so you can negotiate as much or as little as you want and still walk away from the deal at any point before signing without losing your deposit.
Fun Fact
Research shows that buyers and sellers who negotiate are both happier with the result. Sellers who receive their asking price right off the bat wonder in hindsight if they should have priced their house higher. Similarly, buyers whose offer is accepted outright ask themselves if they should have offered less. However, if both parties negotiate, the buyer feels like they got a discount and the seller doesn't think they underpriced their home. With that being said, unless you're in a highly competitive market, it’s not advisable to offer your maximum in your initial offer.
What should I do if the seller is being unreasonable?
Like the answer before this, it depends on how badly you want the house. Are you willing to deal with the seller's shenanigans in order to obtain the house? Before the contract has been signed, you are free to walk away at any point.