I talked to a tech at Wilwood about this very topic. He didn't mention the air bubble issue, so I cannot comment on that. He did say that the dot 5 fluid does not absorb water. This might sound like a good thing, but brake fluid was designed to absorb water, which condenses in the lines. Have you ever spilled brake fluid on the floor of your garage, and check it out the next day? Pretty wild, right? Otherwise, the water will form, and compress, over time, causing a spongy pedal.

He told me that I might have to bleed the brakes more often with dot 5, depending on climate, driving styles, frequency, conditions, etc. He said that he would absolutely not recommend dot 5 for a road race style car. However, mine being more of a show/street cruiser (i.e. not extreme endurance) he said to absolutely use dot 5 so as to not accidentally ruin any painted parts.