Adding the launch parameter you listed above got the game working, it now crashes every now and then but nothing to bad.

So after logging back in just now it appears as if all the ammo I used is back in my inventory, the magazines that were shot empty are full.

This just happened to me,
I was in a small town, walked into a building, shot a zombie with a suppressed pistol and nothing happened, after shooting the zombie about 7 more times I ran out and faced 4 more zombies.
I pulled out my suppressed M4A1 and tried to shoot all of them none of the shots did any damage to them, I almost died. I had to run away from them, this is a BUG.