I don't think 1/0 is too big, personally. I use mostly size 1 and 2 octopus hooks with shiners for lakers and have no problems with hookups. A 1/0 is barely bigger than a 1. Like you said, you need to match the hook to the bait. If you're using big bait, you need a bigger hook or it will get hidden and miss fish. We used to use 2/0 - 3/0 on big Swedish Pimples with no issues. Lakers have big mouths!