[Accelo]

I have personally had no luck with impacts. When you are close there just isn't the control you need when using an impact. I can almost guarantee you will end up over tightening the pinion and your preload will be too high.
I use an extra long SnapOn breaker bar with a cheater on it.
I back up the pinion with a pinion wrench but there is no reason a large pipe wrench wouldn't work. I just can't have teeth marks on customers pinion yolks. Adapting a typical 1-5/16 socket to a 1/4" square drive inch pound torque wrench is always and issue. Preplan for this or you will end up guessing on the torque.

My pinion bearings under preload are not smooth. Is this normal
Can be but, but guessing by your description the nut may be over tightened? What is the turning torque when this is an issue?
Typically you have a brake away torque and turning torque. This is why you need to use a dial type torque wrench for this job.
Rick