A tapered reamer made for tubing works as well as the ones sold specifically for RC. I paid $4 for mine and it works great.
An out of track prop is going to cause some circular vibrations which will mostly stress your engine mount and firewall, but I suppose could show up as tail wiggle. Sanding the hub is the right fix, and it's not hard to do. Lay the sandpaper flat on a table, then apply pressure to the high side of the hub and sand it. Go slow since you don't have to remove much material to make a noticeable difference. If you go too far, just turn it around and sand it the other way.