I have thinned Stynylrez, but I normally use it straight at around 25psi with a .38 needle. When I did thin it, I used UMP Thinner and it thinned very nicely. I think it actually works better straight, it self-levels better and you get a better finish.
I have not had an issue with handling, masking or sanding over the primer. The key is to let it fully cure before any major sanding, a good 24 hours is what I typically like to do, then I will sand and it feathers out very nicely. Then you can go back and recoat any areas that need it.
I typically wash the parts in warm water with a mild dish soap before construction, then before painting I wipe them down with 91% ISO and then a tack cloth.