First, you have to use stabilizer as the absolutely final bath on your C-41 film, or bacteria/fungus might eventually eat it. And yes, the bactericide/fungicide would wash away in water+photoflo. There are some things you can do to improve the issue with water spots: mix STAB with distilled water (I assume you do that anyway), prerinse your film in deionized water before you immerse it in STAB, mix your own STAB from Photoflo and Formalin (formulas can be found (there was a url link here which no longer exists) on APUG).
About old paper: the most obvious sign that paper has aged is that contrast goes down. I've done enlargements on some ancient multigrade paper at grade 4, and when I switched to a fresh batch I suddenly needed grade 1. The other difference I noted was that grade 5 needs a lot more exposure than the same paper at grade 4, and by "a lot more" I mean by factor of three or more. These two things happen with old paper before it shows the next and even stronger sign of expiration: fog. Required exposure time per see means very little, because it depends strongly on which paper you use: in my experience I need four times as much exposure for Ilford MGIV warm tone than I need for Foma 312 paper.