What is the best way to stop a rash vest from bunching up under a wetsuit?

Don't wear one is the best answer. It is not what they are designed for. They are made to protect you from Board rash, not be a wetsuit liner. In fact, they could offer minimal added warmth. I suspect that it might actually have the opposite effect. A 1 or 2 mil vest under your wet suit might help retain some heat in your trunk. I suspect that board shorts are probably the best answer to the second half of your question, although going Commando is the most common route. a Speedo might help avoid some wear and tear on the privates.