I notice a category of items in the inventory called "Lures". What are they for? I guess they're for attracting monsters. If so, what lures would attract what type of creatures?
All of the lures list the monsters they attract in their description.
Reprinted below for your convenience:
Rotten Meat -- Lure for Nekkers and Trolls
Bauble -- Lure for Wraiths and Drowners
Endrega Gland Extract -- Lure for Endrega and Arachi
Phosphorescent Crystal -- Harpy Lure
Thumper -- Bullvore and Rotfiend Lure
(I may be missing some)
What I do is, setting traps and setting the lure in the middle of the trap (stand on the trap and set lure), or right behind it, so that the monsters walk into the trap while getting to the lure.
They don't work very consistently, though. I've seen monsters walk right past me and into the lure, or just ignore the lure and attack me instead.
For the details on which monster is lured to which, see Raven's post.