I agree the default deadzone is pretty high in a lot of cases, it was set a long time ago, when it designed for both analog-devices-to-digital-game-inputs, and analog to analog. Mame's current analog to digital map is way better than the old way, but the deadzone is still there. The default value also has to cover all analog devices, from cheap analog gamepads with big wandering centers, to higher end devices like the one you got. The 5% value you set it to is a good number, but you might want to go even a little lower (2-3%), as long as that doesn't get into the floating center. Or if the wheel's driver has a deadzone, you can set mame's to zero, and only the driver's deadzone will be in play.
Another setting you might want to look at is the -joystick_saturation (not sure exactly what it's called in mameUI) setting. It's like the opposite of deadzone, if you turn the wheel past the number (the default is 85%), mame sees it as fully turned. 85% is, IMO, a great number for joysticks, but too low for analog wheels; you might want to try in the mid to high 90s (95%-99%).
BWTW, I'm using percentages (such as 85%), instead of the decimal number mame uses (0.85) as I feel percentage makes more sense, and 0.85 = 85%. I hope it didn't add any confusion.