At the rear quarter you need at least a 1/2" of clearance between the tire and hard parts to keep the tires from rubbing under most "real world" conditions. But even that depends on your suspension, how tall/soft the sidewall of the tire is, the ride height, etc. On my Duster my 295/35/18's would rub going through drainages/parking lot transitions or over speed bumps until I installed the rear sway bar. That was enough to control that little bit of extra body roll to keep things from rubbing.
As far the the quarter lips, you can fold them flat with enough patience if you wanted to. But the rear quarter lips are double layered and have spot welds, so, to fold them flat you'd need to do some extra work. You'll need to start the fold with a dolly and hammer, I have a dolly with a tapered edge that works well to place against the lip where you want to start the fold, it sets the edge and keeps any damage from being done to the quarter. Then once you have a little angle on the lip and a fold started on the edge you can work the lip flat with the roller. You'll need to make multiple passes, moving the metal a little more with each pass. The front fender lips are much easier, they can be rolled without any hammer and dolly work in just a couple passes.
And if you're going to move a lot of metal, like to roll the lips flat, a heat gun on the paint will help keep the paint from cracking. Get the paint nice and warm and it will be a lot more flexible, especially if it's relatively new. That's also the reason for not using the hammer and dolly the whole time and skipping the roller. I only use a hammer and dolly on the rear if I have to, it's a lot easier to crack or pop the paint. With the double spot welded layer though it really helps the roller to set the edge of the fold with the hammer and dolly, then use the roller to move the rest of the metal slowly and consistently.
This is like the dolly you'd want, there are different versions but even this "general purpose" one works well. You can set the tapered edge (bottom left) on the lip while you hold onto the rounded part, and strike the inside edge of the lip at an angle with your body hammer. That sets the edge of the fold without damaging the quarter.
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