My first build, like many others here, was a Huffy Cranbrook.
And like them I had sprocket alignment and dust cover issues using both rags.
I flipped the sprocket so the cup faced out and up against the 'tits' on the spoke heads coming through the rim and just used the back rag.
Before I tightened it down I rotated the sprocket in the direction of drive force so the bolts were up against the spokes as well (no forward slip).
The sprocket fits the hub perfect so no "wobble", no brake arm issues, and as mentioned no dust cap issue either.
The guy in 'finical bind' I sold it to came buy several months later when the end cap of his tailpipe blew off and I checked it when I did chain matching on it (this was my first build, before I learned to scorn drive chain tensioners) and it looked great sprocket to spoke wise.
I gave the mounts a re-torque because they were due but to date still no problems with the mount and he is on his 3rd set of tires from sheer mileage wear.
i DO NOT recommend the Cranbrook bike though.
Crap bike, hard to build, and it essentially has no brakes.
I put a side pull front brake and larger rear pedal sprocket on, but by the time you add up the parts cost and time you could get a bike that has what you need anyway and goes together easier.