Flappy lumpy chain and possible leaking gearbox output shaft

[Dead Eye]

The chain flapping about is perfectly normal and nothing to worry about. With the wheel off the ground there isn't enough resistance so the wheel begins to briefly spin faster than the chain causing the chain to become loose, the wheel slows and the chain tightens and yanks the wheel forward again The gasket around the sprocket has absolutely no use what-so-ever in my opinion so I don't both replacing it at all.

Hopefully someone with better knowledge will be able to comment on the output shaft leak