The fuel leaking on the motor is most likely due to a worn out float needle valve and/or float valve seat. You can try replacing the float needle...what happens is the rubber tip gets worn, and no longer gives a good seal...same with the "seat" it rests in.
I went through this with mine for a few months, replacing float needles, only for it to be a temporary fix, because the seat was also badly played out, being the original carb. So I just opted to buy a brand new carb from Sudco...problem solved.
As for the surging...you want to get that leak fixed/figured out 1st....then get it jetted as precisely as you can(making sure the float height is set correctly first).
There's lots of threads on here concerning surging, most of them are old threads, but still very useful...do a search on surging and you'll find plenty. As rekklesj mentioned, you don't need it to idle...I myself don't have my bikes set to idle...I find it annoys me...but, you'll also find that in some of the surging threads, that some members found that setting the bike to NOT idle, actually helped reduce the surging considerably....whereas some members found no difference at all....so it could go either way for you, but worth a try.
