first timer 318 rebuild

If I read your build thread correctly, you're running open chamber 318 heads anyway. Unless you're running a closed chamber, you're in no danger of hitting. .033" would be close for a close chambered engine, but even then as long as you're not spinning it to the moon, you'd likely have no issues.

The .035" number is really kind of an arbitrary closest recommended tolerance based on max intended RPM, and what factory parts remain...pretty sure it also harkens from SBC lore. The longer the stroke, the bigger the piston, the greater the piston speed, the more that tolerance should be opened.