Ok, to follow up:

So far, I believe it is ok. I elongated the holes with a large rat tail file on the starter body itself. This allowed me to move it another 1/8" or so away from the flywheel in order for it engage nicely.

When I took it off before, I could see that it would hit the flywheel but not engage all of the time.

It is possible that the bell housing is slightly moved, but I thought these were like a 727 (mine is NP435) where they have dowels/pins.

Time will tell. Thanks for helping!