Hey Warren. I would check the condition of those threads first because it's very common for amateur wrench people to massively over tighten that simple pinch bolt and strip out the aluminum swingarm. You can make your own thread chaser by cutting a couple slots in the threads of a long bolt if theres enough left, or heli-coil and make sure to get it straight.
Ya 5/16-18 socket head allen 1.25" long is what came out of mine. Approx 28 ft/lbs is plenty, not sure what the factory spec is, but thats close. You can look up the exact spec yourself in any part diagram like the one on Twin Motorcycles site. FYI, a regular hardware store black oxide coated one will rust in a big hurry. Use a stainless or zinc plated one. Mc-Master-Carr Grainger, etc and a little anti-seize.
There's no inside or outside to the bearings. The RS suffix of the bearing part number means a dual seal. Pay attention to which side gets installed first. Supposedly makes a minuscule difference in wheel center because they don't both bottom in the wheel, they bottom on the bearing spacer. Its in the manual.
Buellmods.com
Lowering the bike isn't hard. Try dropping the rear pre-load to zero and run the forks up into the triple 3/4" see if thats enough to help, it will take less than you think. It isn't rocket surgery. Ignore the 'yer gonna kill yerself man! It GEOMETRY N' STUFF' crew. They don't understand suspension well enough to know that small changes are perfectly fine.
Have you tried a lower seat option? Careful with clearance to the ECM, there has been issues with the ECM cracking if it's contacted by the seat and a relocation bracket is available or easily fabbed.