> I have never seen anyone write "Prince's Hwy" (or "King's Hwy" for that matter), the apostrophe-free version would be far more common.

I don't know what to tell you; I've seen it often. I'm talking day to day here, text messages and handwritten directions. If you're thinking of things like road signs, those will obviously follow official usage.

> The "Princess Hwy" thing is also common I think because the pronunciation most often used sounds a lot like "Princess", particularly when it's run right into "Highway" without a gap.

Obviously that is so, but I would suggest that the reason 'Princess Hwy' is comparatively so much more common than other similar mistakes (e.g. 'sea' for 'see' etc.) is because the official name (Princes Highway) feels so unnatural in English that it fails to act as a meaningful standard for usage.