70 dart 470 ci drag car build.

I might have to start over and bang the race out
Yes that's where you put the shim for pinion depth. The smaller shims by the outer bearing are just to set the preload on the bearings. I wouldn't worry about them even being there right now. Just leave them out and keep bumping the nut just to get your desired drag. On a Dana 60 it should be 20-30 in/lbs of drag turning.

The reason I say just to leave the preload shims out for now is because you are not final assembling it at this point. You are probably going to have the pinion out a few more times just setting your depth. Once you get it figured out then you can figure out your preload shims.