I agree with those who said to just wipe the gun down with an oily rag at the end of the day. Several years ago when I worked as an armed guard I carried a blued S&W Model 10 and that's what I did. I never had a rust problem, even when working in very hot, humid conditions that left me soaked to the skin with sweat.
As for your other questions...
1. I used BreakFree CLP. Never had an issue with it. As long as you use a good quality oil, the specific brand isn't all that important, imo.
2. I've never used kydex holsters, but I think they are probably better at protecting the gun from body sweat/humidity than leather. Leather can actually trap moisture. Smooth-side out tends to be more moisture-resistant than rough-side out. Horsehide holsters are generally more moisture-resistant than cowhide. However, one thing to keep in mind is that many leather holster makers apply a synthetic finish for added protection. I like the comfort of leather, and I've used a leather IWB holster, mostly a rough-side out model, for the last 6 years or so and have never had a problem with corrosion (ok, my guns have been stainless steel, but they're not exactly rust-"proof"). The key is to avoid storing your gun in the leather holster. I carry my gun pretty much all day, but when I go to bed I take the gun out of the leather holster and stick it in a nylon pocket holster (after wiping the gun down, of course). This lets the leather holster breathe and release whatever moisture it might've absorbed over the course of the day. Even better would be to have two identical leather holsters and alternate every other day, giving each holster a full day to air out, but I wouldn't consider that necessary. Another trick is to periodically apply wax to the smooth parts of the holster (never apply to rough-out leather), which adds further protection; I like Kiwi Neutral Paste Wax. With all that said, though, wiping the gun down at the end of the day with an oily rag will go a long way towards protecting your gun regardless of what material your holster is made from. One thing to note is that whatever holster you choose, you're going to experience some finish wear, so be prepared for that.
3. Hip Grips are a personal choice. The same gun care guidelines would apply. Personally, I don't like Hip Grips because I prefer the security of a holster that also covers the trigger, not out of some concern for rust prevention. Also, based on my limited experience (I have experimented with Hip Grips), I think a K-frame may be too big for Hip Grips to be used effectively. YMMV.
4. I'm not that knowledgeable about rust removal from a blued gun, so I'll leave that advice to others.
5. The only other advice I can think of to offer is to always wear an undershirt/underwear between your gun and your body. It will go a long way towards minimizing corrosion as well as making it more comfortable to carry.