5606 worked fine in these brakes for me. The old Wagner cylinders with Napa seals could stop double puck Clevelands with bushwheels on a dime and give you change.
Yes to Dot 3. Ours came with 5606, so I stuck with it.
I have been using Dot 5 on the J3s, but it s now $40/pint, and since both use MS O-rings everywhere, I may succumb. I will, however, use inverted flares until they are no longer available.