you've got the feel...

resistance is bad. too much bearing preload wears **** out and adds friction. but too little allows sloppy movement that creates the same problem. you seek balance, grasshopper.

if you've got cup/cone bearings (which it sounds like you do), the adjustment is more critical. with sealed (cartridge) bearings, there's a lot more tolerance.

with the wheel out of the frame, try to move the axle perpendicular to the axis of rotation (ie: up and down). feel any movement? that's too much.

this takes some practice. i suggest making it way too loose, so the lateral play is obvious. then tighten a little. still feel it? tighten a bit more. still feel it? more. and so on. you want it as loose as possible, without *any* discernible lateral play.

as has been stated already, you'll need at least 2 cone wrenches. lock up one side tight (locknut against cone nut), then adjust the other. once you get (very) close, if you just lean on the locknut it will move the cone nut ever so slightly.