How does Dolphin's cheat system work? Are AR codes memory hacks? If I, let's say want to unlock all minigames in a Mario Party game, should I favor 100% save files over cheats?
How AR codes operate with memory card saves, I also don't know.
Yes, AR codes are memory (RAM) hacks. They can either change the data (3 lives changed to 255 lives) or change the game code (lives never decrease).
Memory cards save data, so if you use a 255 lives cheat, then the card will save the 255 lives. You can then turn off the cheat and reload your last save and the 255 lives will still be there. If you use an infinite lives cheat and make a memory card save, turn off the cheat and reload your last save, then the cheat will be gone and the game will act like normal.
Whether you use 100% save files or AR cheats depends on what you want to do. If you want to see a particular level without playing through the whole game, use the 100% save file. If you want to play through the whole game but with more lives, use the AR cheat.
The cheat sometimes doesn't stay permanently after saving even if its saved. Cheats can sometimes alter both programming and data.