As for strobe use - I don't know if it hurts them, but I do know that they will allow MANY shots before leaving the vicinity, however, they typically turn white, which I assume means they don't appreciate it much.
Hello Rob,
I have been told by the curator of a UK Sealife center that strobes physically damage the sight of Cephalopods and cause stress.
A captive octopus had died after being photographed by the public using flash. Obviously a contained animal has little or no place of retreat.
I have seen mixed responses with Little cuttles (Sepiola atlantica) where the creature would physically shake from being startled by my flash to being hounded by one Cuttle while I tried to photograph something else. If a creature shows distress then I leave it alone imediatley. As some creatures use disguise as defense they may not always move away.
If you think about it these guys live in low light conditions and so a strobe being fired a few times a close range must be similar to firing the strobe in your own eyes in the middle of the night.
Try it out... you may even get a slot on Jackass TV 
I have just seen the Octopus take the shark video........ the shark didn't seem too bothered by it!
Best wishes
PauP