The lure has a time limit on it, so you want to equip it just before you begin fishing in order to get the most out of it. So, first equip your fishing pole, and then open your character screen - you will see the fishing pole in the weapon slot at the bottom. Now, open your backpack and right click on the lure - you will see the cursor start to glow, which means you are ready to equip the lure. Then all you need do is click on the fishing pole and begin fishing (although its a good idea to close the character screen and backpack first).
I like to use one of the other action bars, we get six I believe, to fish with. Switch to another action bar, open your skill window, and drag the fishing icon onto one of the slots. My mouse has a thumb button which I have set to the number 8, so I have the fishing icon on that slot. Its easy to cast that way.
There are other posters here who are strong fishing advocates, and they have convinced me. Level your fishing as far as you can, as quickly as you can. You can level your cooking at the same time by cooking what you catch. One of the merchants in the area you fish will generally have a recipe for one of the fish that you can catch in that area. You will always have free food to restore health that way, and at higher levels you will see some nice buffs also.
Happy Fishing! (And don't drink too much beer - you will forget to use your sun screen and wind up with a sunburn!)
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"the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country."
Hermann Goering, April 1946.