When trying to remove hard lines and artifacting and improve general occlusion accuracy, the recommended workflow is to turn on Final Gathering in the Render Settings window (see Indirect Lighting tab in the Render Settings: mental ray tabs). Once Final Gathering is turned on, the Occlusion Rays and the Occlusion Falloff attributes (in the Lighting/shading > Batch Bake (mental ray) options dialog box) do not contribute to your bake.

To improve baking quality, use the Final Gather Quality and Final Gather Reflect attributes in the Texture Bake Set node. In addition, you can also tweak the Final Gathering attributes in the Indirect Lighting tab in the Render Settings: mental ray tabs). In particular, you may need to tune Accuracy and Point Interpolation, while Point Density has no effect on baking.