When I say bouncing on the springs, I am referring to an undamped system vibrating at it's natural frequency. One easy way to see this is to watch the back of the car/truck when it has no oil at all. Push down all the way in the rear and then let go. If it just goes up then you've got no bounce. If it goes up and then back down and then back up then you do. When you drive, if you see the same thing happening, this is what I am referring to. The front end is much harder to notice since more weight is rearward. Watching the actual chassis movement is another way to observe it but this isn't always easy.

The car should ultimately settle at whatever ride height you have chose. That's the goal. You need to not pay attention to what bottoms out on the bench or which end does it faster. What's important is that the front and rear move up and down at the same rate. That's it.

As far as needing a light oil, you might. Then again you might not. I generally like to run on the heavier side of the tuning range so I'd try to go with heavier oils until they prove to be too heavy. You'll know when this happens since you are no longer absorbing the bumps but are instead being kicked around by them.