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I totally agree. I use String all the time and in all the ways I know I shouldn't and my gadgets never have any problems. So, in practice, I don't see the harm in using String and I'll keep using them.
Are you sure your module will run on 3.3v ? Some modules need 5v to run while some work on 3.3v. Also, what Arduino board do you have ? Most have 5v logic level pins. You must ensure that the logic level matches between module and arduino.
Typically you would want to use the BT module by connecting it to a separate UART. But since the UNO has only 1 UART you can't do this. You CAN use SoftwareSerial however, which lets you use make a software based UART on normal digital IO pins. Apparently it is possible to program over bluetooth though. create.arduino.cc/projecthub/mansurkamsur/…
Please post some code that you are using. Without a starting point it is difficult to offer any help. But do a google search for "blink without delay" for an approach that might work.
Gotta be something to do with that register you set, or the setcrystal thing or one of those libraries. To prove it, just upload a dead simple delay sketch and see if it works then.