How do I determine what size zig-zag stitch to use?
This is indeed a matter of preferences, although some generic things can be said about it.


The wider the stitch, the stretchier the result. Imagine a zig zag stitch of width 0 (which is actually a straight stitch of course), and the result will be as stretchy as the sewing thread.
As for the length, my advice is to make them not too small in order to avoid wobbly edges. Something else may help here: a wobbly edge is the result of the fabric being stretched while you're sewing. You could stick some tape on top of the fabric and sew right next to it. Beware: don't use duct tape or something with a very strong glue, as you want to remove the tape afterwards without damaging your project!