I love my e-bow, and it's on at least 50% of the songs I write & record.
As mentioned above, Delay is a great effect to smooth it out. I don't usually need high gain, but HB pickups will help.
My only problem is that I can never change strings smoothly. I don't know how others do it so well.
I sometimes use a slide with the E-bow. It almost makes it sound like a Thermin - there's no attack or decay, and the notes flow, because you're bypassing the frets.
I thought i was innovative, but here's a clip of someone else doing it (it's really only noticeable in video at around 0:10, but it's a solid atmospheric treatment):
https://www.youtube.com/watch?v=HGaz7Ff0WvM