VICE (c64 emulator)
The most convenient way to test and run projects is in an emulator. This is especially true as I don't have access to c64 hardware in the first place.
As far as hardware emulators go I find VICE (x64.exe) accurate enough, and includes an extra accurate version (x64cs.exe) when it is needed. Being able to switch between NTSC and PAL and various revisions of the original hardware helps a lot too.
At this point it is obviously up to proving that my code will work correctly on real hardware but that's a challenge for another day. First I'll need to get hold of one and some way to transfer the .prg file!
The built-in machine code monitor in VICE is nearly identical to my first machine code experience (MON-64). Technically it is a fairly complete development environment in itself and what I used for years when I got started. Having a separate assembler and linker makes development roughly millions of times simpler.
The key VICE feature for this project is the remote monitor which allows a separate debugger to connect with the emulator.