The stocker is about as quiet as a muffler gets.
If yours isn't, there's something funky going on.
There is no packing, nor is any needed. It's purely mechanical.
The baffle/spark arrestor with the screen and the propeller thingy should be as you've described. If the are no openings, burned out spots or cracks in the stainless that part is fine.
Looking down into the muffler with the baffle removed you should see a "nosecone" at the far end of the inner tube. The nosecone should be solid and there should be two small holes in either sidewall about 1/2" in diameter. There should be no holes, openings or daylight otherwise visible except to the sides.If the bike were run lean enough for long enough it's possible that either the nosecone could be burned off, cracked or the holes enlarged by heat.
Other than that there ain't a danged thing that can go wrong with one.