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Abstract: The development of gas condensate reservoirs with a large gas cap, thin oil rim, strong bottom water, and natural barriers faces numerous challenges, including reservoir heterogeneity, coning effects, phase changes, and multiphase flow dynamics. The influx of gas and water may lead to a low recovery of the oil rim, while reservoir heterogeneity and natural barriers further exacerbate the uneven distribution of reservoir fluid, complicating development strategies. This paper aims to investigate innovative and effective development strategies for this type of reservoir. A detailed, proportionally scaled numerical simulation is performed based on the experimental results of an artificial sand-filled model, providing novel insights into the dynamic behavior of these reservoirs. By understanding the phase behavior and fluid flow characteristics of the reservoir, the study simulates various strategies for the rational and efficient development of the gas condensate reservoir. These strategies include well patterns and completions, the decision to develop the oil rim or gas cap, depletion rates, the bottom water control, and gas injection. The results show that horizontal wells or highly deviated wells are more suitable for the development of the oil rim, as they provide larger control ranges. The presence of strong bottom water is advantageous for displacement energy supply and pressure maintenance, but it intensifies water coning effects, leading to an earlier breakthrough and a sharp production decline. Therefore, it is preferable to apply highly deviated wells at the oil–gas contact, developing the oil rim at lower rates and smaller pressure gradients, followed by developing the gas cap. This approach can reduce water coning effects and improve recovery, with oil and gas recovery reaching 24.4% and 67.95%, respectively, which is an increase of 16.74% and 17.84% compared to direct depletion development of the gas cap. Due to the strong water bottom, continuous gas injection at the top of the reservoir becomes challenging. This study introduces gas assisted gravity drainage with water control technology, a novel and highly effective approach that addresses the impact of bottom water coning effects on the oil and gas zones and overcomes the limitations of gas flooding in reservoirs with strong bottom water. This method can significantly improve oil and gas recovery, achieving recovery of 39.74% and 84.50%, respectively. Compared to the conventional depletion strategy of sequential oil rim and gas cap development, this method achieves additional improvements of 15.33% and 16.55% in oil and gas recovery, respectively.