I wouldn't worry about the 1300psi. Either the tank is a bit overpressurized, or the gauge is off. More likely the gauge is off, but it doesn't matter either way.
The working pressure on the Milwaukees takes a little while to even out, so tweak it a bit at a time, and if you change it a little, check back in 5-10 minutes to make sure you didn't go to far.
As far as your bubble count goes, that's for you to decide. I'd suggest keeping the working pressure at between 10 and 20 psi, and don't change it again. The needle valve, like the working pressure, will take a bit to even itself out. Keep checking back every once in awhile to make sure it's set at a rate you like, and when it stays there, don't touch it again.
And check for leaks. Use soapy water, be thorough, don't be afraid to make a mess, and check back in 5 minutes.