I personally use that same flash and a 70-200mm 2.8, often with a 1.4TC added for more reach and I have had no problems with the setup (well no problems which were not my own fault

). The f4 version should work very well with the flash, however for indoor portrait work your going to need to do more than just point and shoot with the flash and there are a range of things you can try/do.
1) Change the angle of the flash head and bounce - if your not in a massive room and the walls are a good smooth colour you can bounce the flash off them, that is aim the lfash head at the walls and take a shot, the light will bounce around and soften, losing that harsh edge. Pointing up at the cieling and behind you are comon positions.
2) Off camera - again this is about controling your lighting and losing that "onboard flash" effect. We are very used to seeing light from a high spot (the sun, heck even lightbulbs indoors) and rising the flash helps to get a similar effect
3) Diffuers - there is a massive market in these from complext and big to simple and small - do some reading and research into them to find out what is the best for you. My self I use a lumiquest softbox for generalist use and I find it works well. The basic idea again is controling the light and losing hte harsh edge to it.
I also strongly recomend you read the following website - it has a lot of info on using flash setups:
Strobist: Lighting 101