Not quite sure I'm following all of your thought Dnmum. The hydraulic low point of the motor is the bottom of the hub right? Not the axle. No doubt I simply misunderstand.
A drip loop is a good idea, I install all my motors that way, with the wire looping below the axle and then going up into the motor from below. This nearly eliminates water getting in by running down the wire. Water can still get in though, of course, running down the fork or more likely just by condensation. In really wet climates, the best thing seems to be drilling a hole in the cover, and once in a while when the motor is good and hot, peeling off the tape over the hole and letting the steam out. Sealants on the axle seem to just help keep vapor in the motor once it inevitably gets in say some folks from the wet places. Same thing goes for the controller, you want it covered, but able to breathe enough to not be in a zip lock bag full of condensation.
