The Saga of a Small Block Fan Shroud

Having the fan a tight fit in the shroud is good: fan will pull a lot of air.
You want about a 3/4" safety gap between the blades & shroud at the top & on the pass side. Rest of the area can be less, 1/2". If you cannot get this by juggling the shroud mounting, then I would trim the fan blade tips to get the clearance. I had do this with my fan.