"Also I noted that although all three shafts line up with the timing marks, at # 1 TDC the rotor is not exactly centered on the plug wire for # 1 plug. It is slightly advanced toward the next plug wire (#3)even though it probably has some electrical contact."

Others may differ, but IMO that's just where the rotor should be pointing, at 0° TDC. This assumes that the "base timing" (distributor position) is correctly set at 12±2° before TDC.

At Crank & Cam 0°, your rotor position shows that it was there 12° earlier, which is correct in my book. It reflects the initial timing advance.

[If the distributor to set to ° at TDC, the centerline of the rotor would be aligned with the center of the plastic connecter plug in the distributor body. Older distributors have a small notch there, to indicate 0° TDC on #1.]
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Bruce Young
'93 940-NA (current), 240s (one V8), 140s, 122s, since '63.