I don't think occasional lugging will do much damage. Howver, it should be avoided if possible.
As I understand it, lugging is low engine rpm caused by a mismatch in vehicle/engine speed, and improper gear slection under high loading conditions. Lugging creates "shock" loads to the piston and crankshaft. You also have a momentary heat rise, since the coolant moves slower than normal.
How does oil protect the engine in this situation?
By providing lubricating films and cooling.
- Is there a particular additive in the oil that helps?
Anti-wear and Friction modifiers certainly help here, since your oil pressure is probably too low to keep hydrodynamic lubrication going. A good boundary additve as backup certainly helps.
- What engine internals gets worn down prematurely?
I would say the wrist pin, the connecting rod, and the large bearings in the engine get stressed the most.
- Does it affect other non-engine related components?
The timing chain or timing belt is also seeing these shock loads. And you will get surges in fuel delivery since the computer is attempting to compensate.
- How in the world do I prevent this!?!?!?
Get the clutch adjusted and make sure the rpm's are high enough to produce a sufficient amount of torque to move the vehicle. I had rather burn clutch material than damage internals.