Rare-earth-doped materials have garnered significant attention as material platforms in emerging quantum information and integrated photonic technologies. Concurrently, advances in its nanofabrication processes have unleashed thin film lithium niobate (LN) as a leading force of research in these technologies, encompassing many outstanding properties in a single material. Leveraging the scalability of ion implantation to integrate rare-earth erbium (Er3+), which emits at 1532 nm, into LN can enable a plethora of exciting photonic and quantum technologies operating in the telecom C-band. Many of these technologies rely on coupling via polarization-sensitive photonic structures such as waveguides and optical nanocavities, necessitating fundamental material studies. Toward this goal, we have conducted an extensive study on the role of implantation and post-implantation processing in minimizing implantation-induced defectivity in x-cut thin film LN on an insulator. By leveraging this, we have demonstrated a cutting-edge ensemble optical linewidth of 140 GHz for Er emission in x-cut thin-film LN at 77 K. This finding highlights the significant progress in minimizing implantation-induced defects through careful ion implantation engineering and post-implantation processing. To the best of our knowledge, this linewidth measured at a higher temperature (77 K) is the narrowest when compared to the values reported for bulk-doped and implanted LN crystals at liquid helium temperatures (∼3 K), showcasing the potential of our approach for higher-temperature operation devices. Furthermore, we show that the Er photoluminescence (PL) is highly polarized perpendicular to the x-cut LN c-axis through systematic and combinational PL and high-resolution scanning transmission electron microscopy (HRSTEM) studies. These results indicate that using Er emitters in thin film LN, along with their polarization characteristics and related ion implantation engineering, presents an opportunity to produce highly luminescent Er-doped LN photonic integrated devices and circuits for quantum and nanophotonic applications at telecom wavelengths.