I've just covered the window on a 126 cartridge and counted the exposures. Lining up the indexing holes with the holes or slots on the paper isn't easy in the dark. My next test will be to cut off the bottom of the paper so this isn't an issue. I don't think there will be any light leaks. (My two 126 cameras have sentimental value so I will not remove the indexing pin - plus on these cameras the pin has to function for the camera to work.)

Yes, unperfed 35mm film would be nice for the 126