I myself am a fan of the N frame over the L frame 69. If you're carrying for protection, you might as well take the bit of extra weight for another shot and less recoil.
When carried on a chest holster, the difference is negligible. For me, the X frames take their toll a bit quicker, but...that might just be cause I'm getting older, fatter and weaker.
The earlier locks on the 329s DID have some issues, albeit rare. I can testify to this because I once owned one second hand with the factory repair note detailing it. The original owner could not get past the incident and was trading it for a steel frame revolver. Your fears are not entirely unfounded, but they are very unlikely. If you're in the mood to assuage modern S&W fears, I'd also add a good extra length firing pin, as I've had a couple that were unreliable due to them being too short for the intent of passing some insane California ten story building drop test or some such.
Either TK Custom or Original Precision make a nice plug to replace the lock. It's a pretty easy swap. Another option is to take the lock out and get a Tromix cylinder release that covers the hole. In any case, that's easy to deal with.
I barely tolerate red dots. I have my doubts about them, but that's not what you asked about.
I've never ran a dot on a magnum revolver, but I've ran some on 10mm autos and not found issue. My current favorite is in fact a Holosun 507. My state agency just cleared red dots for officer carry. Holosun is one of them. Two others are Trijicon and Aimpoint. This is new territory for the state of Alaska, and they wouldn't allow Holosun if they hadn't done their homework and double checked. I think the odds are in your favor, but again...I'm a far stretch from a red dog genius myself.
dlsports.com has a really nice looking mount. (Really nice looking everything, actually) but I have no direct experience.
I myself am an absolute lover of moonclips, but they do come at the cost of fragility that can tie your revolver up pretty ugly. The way I maintain moonclips for defensive purpose is be having designated ones for defense that are basically inspected, unused, loaded with my preferred ammo, and left alone. I also carry moonclips in a rigid pouch. Mine is a Safariland double pouch. I keep a pair of latex gloves in the bottom to push the moon clips higher up and grant quicker access. I run .45 ACP moonclips that run about $1 each, so I have over a hundred of them. I also run .357 mag moonclips that are $7-$8 each. I don't have nearly as many of them. I've never looked at .44 mag moon clips, but I got a feeling they ain't the cheap ones. Many folks complain about them being picky with brass, but I have a pair of vise grips and a couple de-mooning tools that say otherwise.
a Mountain Gun configuration is one of my favorites like the other guy. They just hit a perfect point of balance between portability and shootability. Having said that I like 'em all, including the 329s.
I’ll make it short. I’d buy the 629. In a chest holster, I don’t think the difference between the 69 and 629 would bother even me. I wouldn’t give the lock a second thought. 
