motor plate.

If you remove material from the front gasket face, will there be room for the water pump impeller?

If not, it may still have an affect on cooling performance.
it won't affect it as the motor plate puts the removed thickness back in. basically you're machining 1/4" off of the timing cover and replacing it with the 1/4" motor plate so the impeller is the same distance from the timing cover.
neil.