Recommendation for lubricant: use what the manufacturer recommends. My South Bend 10K, for example, requires light spindle oil (about #6) for the journal bearings, medium-weight oil for the gearbox, and medium way oil for the machine ways. My milling machine, on the other hand, needs #20, and medium way oil.
Engine oil is NOT machine oil. Extremely different requirements. Your machinery is not an internal-combustion engine. One important difference is that engine oil is designed to keep water in suspension, so it will boil out when the oil gets hot. Machine oil is designed to precipitate water, so it doesn't get into precision bearings and corrode them.
As for tool cooling: a low-tech but effective approach is to apply cutting oil with a brush. You can get exotic cutting fluids, or "thread cutting oil" you can get by the gallon at a plumbing supply store works well on steel. Kerosene is good on aluminum. (Watch out for inhaling too much smoke, if it smokes. It will give you a headache, which is probably a Bad Sign.)
Mist cooling is effective and less messy. There is a tendency to use too much mist; you want very little or no visible mist. The cooling should come from the refrigeration effect of the mist evaporating into the air and cooling the airstream blowing on the tool. If you put your finger in the airstream, you can feel the cooling effect.
Try to make a living, not a killing. -- Utah Phillips
Don't believe everything you know. -- Bumper sticker
Everybody is ignorant, only on different subjects. -- Will Rogers
Law of Logical Argument - Anything is possible if you don't know what you are talking about.