So how about that, front wheel flew off!

Wd40 is useful part of the cleaning process.
Wire wheel only if you're gentle. Steel wires on steel threads at high speed could knick 'em up. Wire brush, wd-40 and wipe off the crud.
Try spinning a lug nut on with no wheels. If it smooth, its good, if its gritty, you'll feel it in your fingers.

A thread chaser, thread 'file', or very carefully with a regular die are best methods of cleaning up threads. These are relatively cheap tools and last a long long time. With a die or chaser turn it in, then back off 1/4 turn, then turn it in some more. Don't force it down.
Thread Locker is not a great a substitute in this case. Threadocker depends on squeezing all the air out to set. It's little help if the nut isn't tightened at half decently.

If you can, buy a torque wrench. '68 shop manual says go to 65 ft-lbs for the Belivedere/Satellite and Fury models that use 1/2-20. With no torque wrench, then absolutely follow the recommended procedure of installing finger tight or a little more with wheel off the ground, and then with some weight on the wheel, go around tightening every other nut until all have been done TWICE. To get a very rough feel for 65 ft lbs, find something that ways 50-70 pounds and stick on at 1' on a breaker bar or 30 lbs wieght at 2'.

Replace the stud if you can't get it cleaned up enough to spin on a lug nut without hanging up. Replace the stud if it doesn't really tighten up at 65 ft lbs.

Open ended mag style lug nuts. If you really want, search out the McGuard and Gorilla brands. I haven't looked in a while but some racing sanctioning bodies require open nuts so there is a market.

If you don't want to get open style and long studs, then just do the measurements. One way to reduce the math is run the nuts on without rims until they bottom (gently!) measure with tape or clay and compare with rim thickness.

The Mag style nuts are bit of b*tch because the entire surface is rubbing against the aluminum in the hole as you tighten them.

The rim itself. I see what looks to be a crack in addition to the chip. Neither is good.