what happens if your 904 shift linkage isn't adjusted right?

My guess and it's just a guess, most of what you describe have nothing to do with the trans linkage being off.

My second guess is that if the lever was off by an amount that PERHAPS a valve or two in the trans were not 100% in the right place and some hydrolic fluid and pressure was going somewhere else then where it should have been. That MIGHT explain the change in shifting.

As for harm... If any was caused the damage is already done. Just enjoy the car till there is a need to rebuild the trans. 25 years is a long time but the miles is the killer, my trans was rebuilt last in 81 and has around 136,000 miles on it. Still shifts like new!