First thing is, Don't worry about the movement, it's actually supposed
to move like that (and besides Seals don't Ever restrict movement...)
Next there are two seals there. One is called the "dust" seal and is at the end of the axle tube. It's pretty much a do-nothing kinda seal. Just there to keep foreign debris from wedging between the axle & tube. You don't even need it really,,, I would replace it if you're in there already but, Never take it all apart just for IT (and yes, the axle will just pull out through the Hub)
The other seal is in the hub and called the Knuckle Seal. And here again, not restricting movement of any kind and something you only really need in "good shape" if you have Vacuum Hubs and want them to work properly. It's an expensive seal and you need to use a tool (that you can build from plumbing parts) to drive it in without damaging it.
If you just need to replace the bearing assembly, and have manual hubs, I wouldn't go any farther than that. I save the trouble & expense of replacing those seals and pulling the axle for doing the U-Joint.
A good web page with details of the bearing stuff -> Welcome to guzzle's 4x4 Needle Bearing Maintenance Web Page
And the tool if you need to replace the Knuckle Seal -> Ford Super Duty Knuckle Seal Tool - AKA OTC 6695 | Superdutypsd.com
That should about do it!