One thing I learned this year was, the seeds I bedded or potted got about 100% germination. The ones I poked into hillside soil, maybe 30%. The trouble with this sort of farming, it has a 1 to 2 year learning cycle. Most of what you learn this year won't be applicable until next year, and a lot you won't learn until next spring. I'm still not sure if my 1YO plants died due to the heat and lack of rain in August, or just went dormant. Find out next spring.
So in the interests of trying a bit of everything to see what works best, I thought I'd till up a portion of a promising hillside, and stabilize it with tobacco sticks - we got bags of them here in KY now that tobacco isn't being raised so much any more.
Found a slightly used ATV tiller on craigslist at a decent price. Works good on flat ground, biggest problem is getting the atv to go slow enough. Low gear isn't quite low enough. It's just like a regular tiller, but a heck of a lot easier to move around. The hillside was another matter...
First try - I scoured all the floater rocks off, fired up the tiller, and started creeping across the hill. Just like I figured, the floaters were just the tip of the iceberg, and the tiller started banging around on the buried rocks. About the time I was thinking... maybe I should shut it off... it rattles the hitch pin out, and takes off all by itself. Ran right past me. And I do mean ran, it moved along at a pretty fair clip.
Boy, did I feel dumb. Part of me is thinking, I'd better shut it down before it rolls over and sets itself on fire, but the smarter part of me was thinking, I'm not going anywhere near that thing while it's jumping all over the place with those tines spinning around. It ran about 50 yards before it buried the hitch in the ground, and I could reach over with a long branch and shut the gas off. Duh - there's a reason they put lock clips on hitch pins.
Went back a few days later with a properly secured hitch pin, scouted out and marked the large buried rocks with a probe, and it did pretty good, a lot easier than spading and raking. Like any terracing, go across the hill, not up, and leave hard ground inbetween to keep erosion to a minimum.
Anyway, here's the setup, it's a Craftsman tiller, but looks like a rebadged Agri-Fab unit. Not the most heavily constructed, but the industrial strength DR tiller was two grand, and I found this one for $300.
Most of my property the hillsides are too rocky and steep for a tiller town by a 4 wheeler like that. I do have a few places that might work but expect I would get into some messes like you described.
I have considered trying something like this heavy duty hand tool from gardenweasel for spot plantings. You know just kick back the leaves off a small area, break it up a few inches deep with that tool, then plant 8-10 seeds 1/2\" deep 6-8\" apart, cover with leaves and press it down with my boot to compact and make good contract between the seeds and soil.
Then take a step up or around the hill and do it again.