I just realized these were separate things. Until now I thought Arsenal just expanded on the accessories listed in the core.

How do they work separately? Can I have as many accessories as I want without cutting into modifications? Is there a difference between an internal smartlink accessory and a smartlink system modification?

They work separately completely normally. Modifications still do exactly what they do and accessories still do exactly what they do. Addition of one doesn't affect ability to add another. The only difference between the internal smartlink accessory and the smartlink system modification is price (Maybe, don't remember) and that the latter takes up a mod slot while the former doesn't.

That seems to be correct.
http://forums.dumpshock.com/index.php?showtopic=30102

Pretty much, that. I've been favoring External Smartlinks lately, due to their cost, and that their guncams can take vision mods - which don't take up mod slots. The downside is, I guess, you can shoot them off.

Sometimes things are only mods(-6 silencers), other things only accessories(bayonettes), and other times the functionality is duplicated(Underbarrel Weight accessories do exactly the same thing as Heavy Barrels)

The two systems are mutually compatable, and mixing and matching tends to produce good results.

Oh yeah, I will make an exceedingly difficult shot to deprive my enemy of a slight combat bonus instead of disabling him completely.

While the bayonet (basically an knife) is an accessory, the mounting for it can be either an accessory or a modification, the latter not using the barrel slot (Arsenal p. 150).
Interesting, another place where accessories are less effective than mods.