It depends on the tire, I've been using Metzeler Me33 Me99, now the Lazertec series tires, since '86 .
A 120 width is the widest tire that will fit and I have the same issues as you described, a pain to get on and off .
When these wear out, I'm going back to a 4.00 width rear tire .
I think everyone has their one preference for spline lube, I mix a Moly paste with thick wheel bearing grease for the final drive splines .
I don't know if in the long run it really matters what you use, as long as you clean and reapply the lubricant before any rust shows up .
If the liquid you are cleaning up in the rear brake area, smells like gear lube, the O-rings on the rear brake cam shaft may be starting seep / leak, not an uncommon problem with these bikes .