What chainring are you on in the front when your chain rubs the derailer?? Is common for chains to rub when you are on BIG/BIG and small/small - big chainring in front, big cog in back and small in front, small in back. this is caused by the chain in it's most diagonial positions. What's loose, the derailler itself, the shifter cable or the chain?? If the derailleur gets loose and wobbles, that's not a limit screw issue. The limit screw adjustment is probably what you need to get the chain to drop down into 8th gear, but if it's the cable, you can tighten it using the cable barrel adjusters.