It means the starter isn't lined up correct or the ring gear is the incorrect size. Had that problem on 2 billet flywheels and it turned out that they put the wrong ring gear on those 2 flywheel, they were about 1/8" too big.

 

Is that something that I can live with? Will it cause major problems for the starter? Or do I have to go to the trouble of pulling everything out again? I hate pulling transmissions.

 

You can try adjusting the stater to see if it helps. The problem could cause the stater to end up with a shorter life.