Yes on the spacer. The lube should be on the inside of the spacer on the engine shaft and the comet lube is what I used.I lubed mine because it was always too hot to touch and I figured it couldn't hurt as it spins independently of the shaft.
The belt length difference probably won't make any real difference unless the longer one exceeds the top of the pulley by more than half the belt thickness, it'll want to wonder away if any taller on the pulleys!
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