For my scratch built models I use brass tubing which if you size it right can get a very close fitting prop shaft to tube. I generally thread the prop rod end so the prop can be fitted with a lock nut, as well as solder a brass washer so the prop has some back support when tightened. I then add a nylon thrust washer to the shaft before inserting into the prop tube. For lubrication I use a product which can be purchased at a swimming pool supply store designed to be used on O-rings and gaskets. This is basically the same consistency as vasoline and is water resistant.
Before inserting the shaft into the prop tube, i lube it with liberally with the pool grease, and then sprinkle powered graphite on for additional lubrication.
Slowly insert the shaft into the prop tube and add more lube if needed working it in and out to spread the grease within the tube.
At the motor end, add an additional thrust washer, and attach the motor coupler.
I have not had any issues with water seepage up the shaft when sitting in the water for an extended period of time, or when running the model.