Oversampling and decimation: What filter to use?
Should I, for example, do a low-pass FIR filter to squeeze out as close to 50Hz of signal bandwidth as possible?


Yes, that is exactly what you should do.  That is an extremely low data rate, so even with a wimpy processor I would think that should be able to do a pretty good filter.  Especially since you only need to calculate $\frac{1}{8}$ of the filter outputs.