how do bows play a role?

is it strictly the better the bow the better the arrow you can use?

or is there any hidden range bonus with it?

Bow shoots 1 square longer than a crossbow. And yeah each bow allows for a better arrow. Yew and Magic longbows allowing rune arrows.

Shortbow and crossbow the same range.
Magic is slightly better than Yew, although like badboy666 said, they can both shoot rune.

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