you're assuming that waiting tables in Sisko's is the same infamously crappy job as waiting tables today is considered to be?
Yes, because the job is waiting tables, busing dishes, cleaning up other people's mess, half eaten food, stuff they dropped on the floor.
The job could also be described as meeting people, generally providing a nice atmosphere and just carrying dishes back and forth (which is not an absolutely terrible thing in and of itself). Without the need to pay anyone, there could be enough wait staff on hand to ensure that no one has to break their back working at unrealistic speeds and there is no need to compete with each other for tips; the fact that no one is paying means the restaurant has no incentive to make the customer king, meaning anyone who makes a ridiculous mess or is rude to the staff, etc, gets kicked out and banned from coming back.
It's not exactly world changing work, but for a people person with relatively low ambition and a desire to do something useful with their time it could be a perfectly satisfactory occupation, for a few years if not necessarily for your whole life. Even today there are retired people who don't actually need money but still choose to take simple jobs (like delivering mail or helping in a shop) to pass the time. Remove the ridiculous work pressure currently found in waitressing, and there's no reason why waiting tables wouldn't be just such a job.
The money I remember seeing starfleet officers using was 'federation credits' and it was paid out to non-federation merchants.
That assumng that the barman on space station K-7, a facility run by a Human administrator, was a non-Federation merchant. An assumption I don't accept.
Two Humans conducting business using money.
I actually am willing to make certain allowances for ToS, which was shown to be considerably less utopian all around. My own personal interpretation of the 24th cen. is that there are probably small barter economies throughout the federation (where people trade things like Picard vintage wine or antique glasses) and that some places may ease that sort of thing with a sort of unnofficial currency (like a LETS system), and that there are probably still plenty of corners of the Federation, especially around the borders, where people do still use money on a regular basis (certainly a merchant could not obtain anything from outside the Federation without using it) but that money is probably not 'Federation money', but rather the same kinds of money being used by other races around the Federation (ie, gold pressed latinum or some other common currency).
I would say that in the TOS era which is still having considerably more difficulty keeping its colonies safe and prosperous and well supplied, that money would reach much farther into the Federation, but would still be relatively unheard of on the highly developed homeworlds (Earth, Vulcan, etc.) because their needs are already very well met.