You may have to position the mech slightly higher on the seat tube to avoid it touching the chain stay. That's the only thing that might cause a problem.
I run an m560 front mech with a compact chainset, doesn't seem to cause any problems. The cage on it is a bit longer than, say an m565, but works fine for me.
I use second hand UN72s (I've got 2 around 30 years old, seem to be very very durable, can't wear them out) or new Tange LN7922s which are probably the closest modern equivalent.
I judge the tension 2 ways. Firstly there should be a bit of movement when you squeeze 2 parallel spokes and secondly, by how hard it is to turn the nipples. If they're very hard to turn, they're probably over tightened. Too loose, they're probably under tightened. Of course 'too tight' and 'too...
You could swap spacers on the non drive side to reduce the hub down to 126 mm and re-dish the wheel (quick and easy if you know what you're doing). Having said that, I have a bike with 126 mm drop outs (653 frame) and I just use a 130 mm wheel and I've had no problems with it so far (about 6 or...
I was using the original 113mm axle and went from an STX MC30 to an LX M570, which I think was still the correct length. A shorter bottom bracket, would make it worse, as the chainline would be more acute (less straight).
I ran a 9 speed chainset on an otherwise 7 speed system and it worked ok. The only problem was that when in the middle chainring and one of the two smallest sprockets at the rear, the chain would rub on the larger chainring. A narrower 9 speed chain solved the problem.