while it's true tapered rolling bearings are forgiving in terms of end play, you don't want end play. Think of what's happening when you have end play.
- use the correct socket on the wheel nut to adequately tighten the bearing assembly to seat the components.
- you can spin the hub as you first tighten down but as it starts to hang up from friction don't spin anymore, just tighten the nut and seat the components. Really tighten it to make sure the races seat themselves in the hub.
- back the nut off slowly and be mindful gravity doesn't slide the hub out, keep hand pressure against the hub keeping it on the axle and back the nut off then go finger tight as much as possible.
- if the cotter pin or bend tab thingy line up, then you're at best at zero preload (you're fingers are not that strong). If you have to turn the nut a slight bit with a wrench then it's probably optimal as it's a slight amount of preload.
- when you mount the rim and tire, there should be no wobble and it should turn smooth but shouldn't stop from a free spin in 1 or 2 rotations then you have too much preload resulting in a lot of drag.
- you may need to sand the washer or add a shim to get the lock nut assembly to line up to give the correct preload, it'll depend on what fraction of a turn the cotter pin
- i would say a hair tight is better than a hair loose because to me that means optimal preload but everybody's feel for hair tight is what it all really comes down to. If you can wobble the wheel, it's definitely too loose and will get worse as wear sets in at an accelerated rate.
http://www.pirate4x4.com/tech/billavista/PDFs/Timkin bearing pre-load.pdf
http://www.timken.com/en-us/solutions/automotive/aftermarket/heavyduty/techtips/Pages/default.aspx