Last night I tried using air power against artillery in a bunker and an argument began. The card says to ignore terrain modifiers, but it doesn't mention obstacles. Artillery can fire against bunkers without modifiers so I thought Air Power should be the same. Can't seem to find any FAQ information about it.
Afterwards, another argument: troops firing at each other from opposing hills, with only grass between them. The FAQ says something like "hills are the ONLY terrain that can be in between for line of sight to work (plateu effect)" - is grass considered terrain and therefore I have no line of sight, or if there's no terrain tile then there's no terrain and I have line of sight? I argued that I could, since the more clearly worded rules for Mountains in the FAQ suggest firing at an opposing mountain is okay if there's no terrain tile in between.
Obstacles ARE terrain. So the Bunker's modifiers are ignored as well. Look at your formatting in the base game rules: Obstacles is a subgroup of terrain. DOW confirmed this a long time ago.
The rule of thumb is to ignore the terrain you are standing on and ignore the terrain your target is standing on. Do you have LOS? In your case yes, empty hexes do not block LOS. Anything else in that hex that does not block LOS (such as wire) would also allow you to target each other.
The exception to this rule is the plateau effect you mentioned. If both the attacker and target are on the same level and all terrain along their path of LOS is on the same level, then they can see and shoot with no penalties.