"How much you willing to change here" is the first question. The upgrades over the original bits are marginal improvements. Improvements yes, but I never felt they helped tremendously.
If I'm working over a swingarm on an 01 and back touring bike I either just do it (relatively) inexpensively and use good replacements for the stock stuff. The option to that for me is to upgrade the swingarm to the better swingarm from the 02 to 08 bikes.
Have seen too many of the old swingarms twist or even break. It's really not an uncommon thing at all. If someone is rebuilding the ass end of a touring bike I always try to convince them to at least consider this retrofit.
Be forewarned; it's not the easiest of chores. It's an all day on a Saturday kind of task the first time you do one.
You'd need the swingarm, a 1" rear axle, and new wheel bearings and bearing spacer. You'll also need either access to a drill press and a 1" bit to bore out the hole in the caliper mounting bracket or an 02 and newer caliper as well. There's also a difference up front where the fork shaft goes through the transmission. The older bikes use a smaller OD shaft than do the new bikes. You DO NOT try to make a long bore or hone through the transmission housing to use the newer larger OD shaft. There are bushing kits to make this part straightforward and do double duty as also being the new and improved bearings/blocks/sleeves/whatever (depending on what parts you buy) for the swingarm attachment. I've most commonly used a kit from a place called Sta-Bo (it's their sta-bo III) kit but there are others.
All this will gain you best overall improvement. It is more work though. And more cash. All the improved bearings, spacers, bushings or whatever else you might do at the front of the swingarm won't help a tiny bit when stuff like this happens at the ass end though.