First thing is don't sand the axle. That will just wear out the hole in the wheel.

Remove the outside collar from the axle and see if the wheel has too much play. It should wobble a little but not much. If it doesn't have too much wobble just use a silicone or teflon lube and put everything back together. Don't forget to use some threadlock on the screw to the collar.

If there is a lot of wobble, either replace the wheel or get a piece of brass tube with the inside diameter about the size of the axle, and a drill bit about the size of the outside diameter of the brass tube. If you can find a drill bit about 1 or 2 thousandths smaller than the brass tube you can get a press fit and not have to glue it into the hub. Then lube the axle and install the wheel and go fly.