Bacteriological smears are a one-and-done scenario. Very few of them are intended for repeat use. Basically, all you can expect is that you observe it and then discard the slide. Wiping the oil off will also remove the bacteria as they are not firmly fixed to the slide, despite the "heat fixation" name, as I will explain below.
If you do want to reuse a slide I would recommend that you get a coverslip and cover your slides, sealing the edges with nail-polish or glue will make these more or less permanent. However, this is tricky because you may need to change your high power objective lens (assuming 100x objective) to cope with the thickness of the coverslip. To do this you will need to look for a longer focal-length on the objective lens. Some higher-quality lenses come with an adjuster for focal lengths.
Heat fixation in bacteriological slides is about two things. Primarily, the heating allows drying out of the specimen, which adheres it to the slide enough that it can be further manipulated. For most stains, simply drying the slide without heating will work perfectly well for adherence. Secondarily, it is about killing the bacteria. This is the fixation part and the name is a hang-over from classical biology where chemicals such as formaldehyde or ethanol were used to "fix" the specimen in an unchanging state (fixed state as opposed to changing).
It should be noted that even with passing the slide through the flame 3x, the slide rarely reaches above about 50 C, which isn't really enough to kill most bacterial species with certainty (food safety tells us at least 65 C for 10 min...), and is certainly not enough for tough bacteria like Mycobacterium species - it's the dehydration from the heating that does most of the killing. In addition, most stains have a fixative of some sort in them, usually ethanol, which will work against most of the common bacterial species (though also not Mycobacterium), again by dehydration of the bacterium, but also protein denaturation.
With the colour coming off, I think you have two problems:
First - staining, make sure that you wash the slide with decolourizer until there is no residual red from the Fuchsin. It's a delicate balance, so takes some experience to get it right. Also, make sure your slide is completely dry after your counterstain and wash step.
Second - I think that cedarwood oil is the wrong choice for immersion oil here. The cedrol and cedrene components strike me as chemically similar to phenol, which is one of the major components of Carbol Fuchsin (Ziehl-Neelson) stain (PDF with components). This means it might well solubilize the stain.
Cedar oil also hardens on the lenses and can easily dissolve the glues that hold the lens together, so be very careful using it with modern lenses.
