I have just applied a small amount of machine oil in under the bottom of the
rotor then put back onto the shaft. Hasnt done any thing bad to the end of
the rotor as yet.

Peter

Which part of the distributor are you talking about?

The gear at the bottom oils via an oil slinger on the crank or via an oil
drain hole in the block

The bearing in the distributor may be high speed sealed bearings. Like the
ones in petrol R/C cars that do 25,000->40,000rpm for years.

Bushings wear out but tolerances are small so wear is very little as the
distributor shaft isn't supposed to move sideways. Some places double bush
and/or use high speed bearings.

Brenden