Normally, you want to make sure you are not too blunt or direct. Instead of saying "I don't want this," you would say, "This is a little..." Words like "chotto" and "ga" are staples of polite Japanese, as well as general polite endings, pronouns, and verbs.
Less polite Japanese is used between family members and close friends.
As far as "baka" goes, I once said in class, "Takusan no terebi wo miru to, atama ga baka ni narimasu." Or, when you watch a lot of TV, your head becomes stupid. My sensei told me that using "baka" is only appropriate in joking, which I clearly was. Sarcasm is not very well understood in Japan, but is becoming popular in the younger Japanese.