Bell-housing alignment help

Your dial indicator rod needs to be perpendicular to the bore and on center, smaller dial indicator. Your measurements are not accurate.
It doesn't have to be perfect, but I think you can get it better than it is.
Also make sure it's running about halfway in the bell opening.
AND before you check it, use some scotch brite and make sure the bellhousing surface is smooth. Rub a little oil on there. A LITTLE. get it nice and slick.
Make sure your magnetic base isn't moving.
Those numbers are way off. Make sure all of the above and check it again.