Using Moonfire early on in a fight will grant the most benefit from this spell.
Moonfire is useful for pulling mobs quickly, as not only is the spell instant, but the dot effect will have adequate time to deal its damage.
Using Glyph of Moonfire (and Glyph of Starfire) is guaranteed to increase the overall damage of this spell, even with the initial damage reduction.
The damage over time effect of this spell will not be overwritten by lower ranks of the spell, but the initial damage will still occur.
Without Lunar Shower, it is inefficient to cast another Moonfire before the previous Moonfire's dot effect has worn off, especially with Glyph of Moonfire.
With Lunar Shower however, "spamming" the base damage of the spell becomes a moderately viable way of steady DPS, especially if the player is too low on mana for a normal rotation. Stay in Eclipse (preferably Solar), combine with Insect Swarm, and learn Shooting Stars to maximise your damage output with such DOT spamming. You have to keep running for Lunar Shower to work, making it funny in PvE groups, and also a strong attack in a possible PvP chase.