The rod doesn't touch any parts inside the master cylinder, so I don't think there is a need to lube it. I didn't lube my rod (man that sounds bad) and the creak still went away.
I use a 20 cm extension. The longer the better because you don't want to rub the ratchet on your rocker cover and scratch it. I bought a Superworksgold extension from Supercheap. Pretty good and even has a grip part so that you can turn it by hand even with a bit of grease on it.
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