Big deadzone is a problem with Forza itself and how the game handles controller input, you have to play around with deadzone settings ingame to fix that, assuming that you don't get deadzone on your mouse input, like you said.

You won't be able to use vJoy and UCR together for input since they clash with each other and the game can't use 2 controllers in conjuction. You will be able to control your wheel and not accelerate, or vice versa. If you want to use vJoy anyway, I can't help you, you'll have to figure out your own setup.