If you're using the kit hardware, it's all garbage in my opinion. Go to a hardware store and spend $20 on higher grade bolts, washers, and proper nylon locknuts, and you should be good. That was my experience buying this one I have, that was already put together when I bought it. The stock hardware is all cheap garbage.
you are going way to tight. the rubber is there to flex slightly with the application of force from the engine. them whimpy stock rag joint bolts work just fine. i've used them many many times, for years and they are still holding. you're not trying to smash the rubber , you're making a snug sandwich. not so loose it slops around, but not so tight you are snapping bolts. two finger snug is more than plenty. sometimes you need to loosen the bolts to make it level. i use 2 pieces of 2x4's with a notch to hole my wheel level with a marker glued to the wood, you can tape it as well. i spin the wheel and the marker marks lines on where my sprocket needs adjusted. look up a homemade truing stand to get a better idea, same idea for the sprockets as a bike wheel. snug the bolts, that's all you need.
also if you go to tight you risk breaking spokes when you are riding. the spokes need to even transmit the power to the hub. going way tight makes some spokes take more load than others. plus spokes flex some while in use, and going really tight cause's stress fractures where the rubber wont allow the spoke to flex with the rest of itself, because it is to tight.