Isto means this, isso and aquilo mean that, but in Brazil's spoken language people often use isto and isso interchangeably to say this, and aquilo to say that.
This (isto): the object is near the 1st and 2nd people That (isso): the object is far from the 1st person and near the 2nd person That (aquilo): the object is far from 1st and 2nd people
It depends on the context. That's why they could be used interchangeably sometimes.
Why not "it"? These questions are becoming lessons in mind-reading rather than learning Portuguese?
I'm not completely sure of this, but every time I've seen isso translated as it is when isso is the object rather than the subject, maybe that's the pattern you are/were missing.
I have been wondering, because in some regions they don't use voce as much, can you replace voce with tu or ti at the end of a sentence? Ex. Isso nao ajudara tu or isso nao te ajudara or isso nao ajudara ti . Which of these are correct? (if any). Also do I need to conjugate ajudara to ajudaras?
The correct (and corrected - thanks Luís) version is "Isso não te ajudará". (The other options you suggested are either ugly or wrong.)
*te ajudará. "Isso" is the subject here (if you can call it that), so the verb form says in the 3rd person regardless of changes to the indirect object.