G'day Tim, and a warm welcome to the ODK Forums.
That pulley isn't screwed on; as you say, the combo of thread and key would make it utterly impossible to dismantle.
So it's just keyed to a parallel shaft section. However, it will have been intentionally made a tight fit. And any rust that may have formed on the shaft will have made things a lot harder to shift.
To start with, WD40 is not much chop for anything but getting rid of water, in my experience. A few much better penetrating lubricants that are readily available are CRC 5-56, Inox and Penetrene. Give it a good shot of one of those, and let it soak in for a day or two.
This job is almost certainly going to require a special tool, in the shape of a 3-leg puller which can engage the holes in the pulley. I'd doubt that the pulley is 'wiggling' on the shaft - much more likely that you're feeling slop in the spindle bearings.
But you could try a bit of heat on the pulley hub first - hot air gun or propane torch. Then give the end of the shaft a good rap with a piece of hard wood, or a mallet - not a steel hammer.
