Yes, you are absolutely correct about crank seals leaking air into the crankcase and causing the fuel/air mixture to go lean (HOT), and potentially melting a piston. Not sure Kawi sleds are any more prone to this than any other brand. Kawi certainly did not use cheap seals as original equipment. Any sled as old as our Kawi's, whether it's a cat or Polaris, etc. should have the crank seals replaced. The rubber carb boots are another potential source of air leaks if they have developed any cracks. You should check them closely also.
The jet needle should be a 6DH7. The -3 identifies the stock position for the clip on the needle. There are 5 grooves in all needles. The stock recommended position is position "3", or the middle groove on the needle. That is a good starting point...you can raise or lower the needle one groove at a time to adjust the mid range air/fuel mixture.