1.Your script looks normal to me. First line is redundant, but maybe you need it later in your script.
2. Make a trigger, 500 m, name it something. It should be activated by anybody. When your bomb becomes active, place the trigger with setpos at your bombs place. In on activation field in your trigger write:
"_x setDamage ((damage _x)+.4)" foreach units in thislist
That should work on land units. But also on air units 5 KM abowe your bomb. To avoid that (if you have air units in your mission) you have to get some guru to expand that foreach to only take units in 500 m distance from the trigger - direct line, not only in X,Y plane.