An o-ring chain is pretty easy to identify. There is an obvious gap between the outside plates on the links. The o-rings are meant to hold the lubricant grease inside the pin and bushing surfaces.
I just replaced my sprockets with the same 15 / 39 that were on it. While gearing it up a bit, lowering the final gear ratio will also effect low speed operation / torque Just like everything you change, has effects on other things.
Moving the adjustment 1/2 of a mark is a lot. My chain tightens in only a 1/4 -1/2 turn on the adjustment bolt, not the adjustment marks themselves. Hopefully you took a look at the sprocket and swing arm bearings for wear / slop. (Sorry, I did not take any pics of the numerous times I had it apart)I am thinking as much as this chain needs adjustment, there is definitely something wrong. I can't even imagine a really cheap chain stretching this fast., unless it goes on a combine.. and even then..
Wheel bearings are not the same as sprocket bearings. There is a separate bearing on the sprocket assembly with a rubber damper between the sprocket and the wheel. I tried googling it so I could illustrate the bearing, but was mainly seeing a lot of video's with very little illustration value, and a whole lotta obnoxious thumping, overbearing music.. kinda like going to a car wash or gas station in St. Louis city.