I like to get some non-oily lube on the notches for the shock adjustment. Oil stuff will just hold dirt.
If we call the softest setting the #1, then #2 is the factory setting. I'm 200# plus riding gear, and I like the #3 setting for solo riding.
This is about a drift, or drift pin, or drift pin punch Whatever you use, you want a good fit to keep from deforming the hole.