I just watch TV... I made it a rule that I could only watch one of my favorite shows if I was dilating, so then I was more willing to do it so I could enjoy the show. 🙂 (It worked well enough that I tried that trick for exercising, too!) However, if you're having significant problems with pain and bleeding so long after GRS, it seems as though there's some underlying issue there that you might want to explore.
Tampons are super drying, even for cis women. It's probably not a major health risk, but at the same time, since you're already in pain - I've heard enough horror stories from cis friends about tampons occasionally causing pain and minor tearing to think that it can't be a good idea on top of the problems you already have.
Incidentally, I've never used Premarin (and I self-lubricate enough these days not to need any help anymore), but back when I was newly post-op and having dryness issues my doctor recommended Vagisil lube. NOT the medicated stuff, just plain lube to replace what I was dilating with; he said it's closest to natural vaginal secretions, and he was right, dilating with it made me considerably more moist and comfortable. Plus a little goes a long way; I stopped using pads *or* tampons after switching, because I didn't leak anything after dilation with the Vagisil.