Best day of the week to launch on Product Hunt?

Depends on what you're going for.

Higher chance of being featured and staying in top 5? Sunday.
Lots of traffic but lower chances? Tuesday.

I'd generally avoid Mondays unless it's something you know will go viral. There are so many big launches on Mondays from big brands that it'll be hard to beat them.
Fridays too because people are going out of office and away for the weekend.

All of the above was subjective. Don't have any real data on this.

Higher traffic definely important to me in the short term. Would the other things (being featured, staying in top 5) help my traffic in the long term though?

Friday and weekends

Interesting. Does your expected results map to what @pugson says about expected results from posting in the week vs weekend?