Is what the Shaykh said true: that merely looking or remembering does not necessitate the emission of pre-seminal fluid (madhy), and therefore neither istinja' (washing the private parts) nor wudu' (ablution) for prayer is required, or did he issue an incorrect fatwa due to the difficulty of performing istinja' at work?

If you are not certain about the emission of madhy (pre-seminal fluid), then neither ablution (wudu') nor purifying the spot and clothes is obligatory upon you, because the original state is purity, and certainty is not removed by doubt. What the shaykh mentioned, that madhy only occurs with erection and intense lust, is incorrect. Madhy is a thin, white fluid that is discharged at the onset of lust, not with intense lust, and one may not feel its emission. Both men and women experience it. Furthermore, the difficulty in purifying madhy is not a given, as Islamic law has made it lenient by sufficing with sprinkling (nadh). Fear of gossip is not an excuse for abandoning obligatory purification.