If I were you, I would get an ER32 collet chuck and collets.
CTC has an MT3 chuck for $20 (
link) and an ER32 collet set for $46 (
link), plus shipping. It's been several years since I bought anything from them, but I've been very pleased with the quality. I have 5 of their ER chucks and 6 collet sets (ER11 to ER32, inch and metric). The only problem with them is that they are based in Hong Kong, so standard shipping can take 6 weeks. Shars has and MT3 ER32 collet chuck set for $175.
If you want to machine an R8 adapter, the specs for B&S 13 taper are listed in Machinery's Handbook and on the web.
I'm quite sure that those aren't oil cups, but grease cups. You load them with grease, then every so often you give the cap a twist to push a little grease into the bearing. With modern, synthetic greases you don't need to constantly add grease and put up with it getting slung out of the spindle. I would take off the end caps, clean the old grease out of the bearings, load them with
Mobilith SHC 100 and leave them alone until it's time to change the oil. If you have a grease fitting on the front bearing, you DO NOT want to try to lubricate it with oil, especially if you're planning to do a lot of vertical milling. With no front oil seal, that head is not intended for oil lubrication. None of the Van Norman "Duplex" milling machines used oil in the rear spindle bearings and those that use oil for the front bearing are lubricated from the ring-gear reservoir.