Grease for Shimano olives
 

One thing that kind of annoys me is when you crush the olive on a brake line the cable always twists and it ends up binding. I've tried to counteract that by pre twisting the cable before tightening but i can never get it quite right. I've seen people putting a little grease on the olive to prevent that from happening. Is there a specific type i should be using? I don't want to contaminate the system.
And on a side note, how do you properly torque the bolt since you can't use a ratchet type torque wrench? With a crowfoot i feel like it would affect the leverage/torque. Asking for a friend with OCD of course.

I always do it without grease, pre-twisting the cable like you side. Maybe it's a matter of practice?

I have never used a torque wrench on brake lines. I just use a spanner and tighten it by feel. No issues so far, even on Magura carbotecture (plastic) levers.

I tend to torque it gently, and if it leaks I tighten it a bit.

One thing to try is mount the hose to the brake lever first and then remove the caliper and mount the hose to it so that even if it twists you can just keep tightening until the caliper has the correct orientation for re-installing. Just don't overtighten obviously.

Olive oil? (sorry, couldn't resist!)

I use just a small dab of whatever grease is around and use it only on the side of the olive which the nut will be spinning against. Should be away from the internals of the hydraulics there, and have never had any issues. Things do seem to always 'twist up' nonetheless. Just remove the lever from the handlebar or the caliper from it's mount, then rotate it each way to see if you can get a more elegant cable arc. Reinstall.

Torque is tricky, I just look at the threads showing on the nut of a factory install (same model, hopefully the other brake on the bike) and hope that it 'feels right' somewheres just shy of that depth.