I just married my trans to my motor (TH350 to a small block 350) I put the torque converter all the way on the trans and made sure it was where it was supposed to be at. When I bolted it to the flexplate I had to pull out the converter a little so it could bolt on. It wasn't alot but this is my first time doing this so I'm just making sure everything is ok. I hand cranked the motor and it spins freely with the trans on it. Any answers will be greatly appreciated and if I left out any info you need just ask.
that's normal. you should have to pull the converter up to the flexplate about 1/8" give or take a little.
did you turn convertor clock and counter-clock ways a few times to make sure it engaged front pump and splines before you mated them. pulling it out a little is normal, ask my wife!
You need that gap so when the converter expands (balloons) it doesn't push on your crankshaft, take up the end play and wipe out the thrust bearing.
No gap after its bolted. What you speak of is why it's called a flex plate. The converter gets pushed forward or out of the trans.