My personal preference is for fully shaved, because I like to see the target and I prefer not to have hair in my mouth
As for terminology, I think 'pussy' refers to the flesh body part, whether shaved or not. I don't think it has anything to do with the hair. So from that perspective, I guess I equate 'pussy' with 'vagina'. For 'hair, I might refer to it as 'bush, and for 'shaved' I might refer to it as 'hardwood floor' (as in, I wonder if the carpet matches the d-r-a-p-e-s .... or if it's a hardwood floor.
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Is 'vagina' too medical a term to use? I don't think so. I used to hang out with some very strong-willed, independent women in a competitve environment - the kind who don't take crap off anyone. And I can tell you from first-hand experience that one of the hottest phrases I've ever heard come out of a woman's mouth in a group setting was "I have the vagina, so I make the rules." To hear women referring to it as a vagina or vag is plenty enough clue to me that that's what I should call it if I want any of it
"Vagina" is fine with me. Personally I think 'pussy' is a little degrading and disrespectful. Kind of like using the 'N' word for people of a certain color - it's ok for them to use it with each other, but not for an outsider to use. I see 'pussy' the same way, if a woman wants to use it in dirty talk or in personal reference then that's fine. But I won't use the word without her permission.