I have a 773, 783, 784, and 785. I've tested and serviced them all. I agree that the 785 exhibits the most binding and slowdown, especially on O36 and O42 curves.
The 785 is unique in that it's the only Hudson with 700E-style spoked wheels, AND ALSO the steel side plates added to the 773 in 1950, ostensibly to distribute the magnetic flux for MagneTraction. IMO Lionel made a mistake with the 785. This loco doesn't have Magnetraction. When they decided to use the spoked wheels they should have omitted the plates. (Thankfully they did so in 1990 on the reissued 1-700E.) Perhaps the added thickness of the plates is why the wheels couldn't be pressed all the way onto the axles.
There are no standards for wheel gauging in 3-rail O, but specs for the 773 are in the service manual. All of the Hudsons beginning with the 773 were under-gauged slightly, probably the narrowest of any postwar Lionels, which allowed them to negotiate sharp tinplate curves without binding. I've seen plenty of postwar 773s, especially the 1950 version, with axles that were not well-centered (poking out on one side, sucked in on the other.) But the 783 and 784 use a different axle and I've never encountered this issue with them.
I'm not sure that you'll be able to re-gauge the wheels on your loco and personally I wouldn't try. Just run this one on wide-radius curves, and stick with the 773, 783, 784 on O42 and below. If you like the grey boiler you could swap in a 784 chassis but you would lose the spoked drivers, it still wouldn't look bad. My $.02.