On the stock adjustable caps, they have three positions. You presss down and turn right to lock into the next tighter spot. Push down and turn left loosens the adjuster.
jd you measure a bit differently than I do for sag. My first measurement is with the bike upright, no rider, measure from the top of fork lower to bottom of tree.
Then as you say have rider carefully mount the bike. Measure again from lower to tree, the difference is sag. Measured this way, about 35 mm wil give a cushy ride and handling, 25 mm gives a firmer ride and handling.
On the rear I measure from top shock mount bolt to lower shock mount bolt.
The sag should match front to back.
With a zip tie on the fork, leave it on the fork, start with it pushed down, after a normal ride. A 1/2 hour or more, doing some hard cornering and braking, rough roads the zip tie should end up about half way between the fork lower and tree.
If it is much lower then you have a bit much preload or to heavy an oil. The opposite if to high.
The Race Tech site has a lot of good info. Googling motorcycle suspension tuning will lead you to many good sites with lots of info.
As far as oil, a good fork oil is ok but AFT works just fine, The weight is about 10w and being for a transmission it has seal preservers in it as well as anti-foaming agents. All good things for forks.
Expermenting with several oils isn't to costly and you can tune the damping some what.
I have a set of the later 35 mm forks with adjustable caps. I did the Minton Mods to the dampers, didn't add holes just drilled out the four I had. I replaced the springs with a set for an early Harley 35 mm Showa fork. They are made from heavier wire, a bit longer. Can't recall the exact specs, got them wrote down some where.
With the adjustable caps on the lightest setting I get about 25 mm sag. With aft they work well, firm but not harsh.
Leo