IMHO, it should not be that close. What pump are you using? Is it one of those new Edelbrock high volume pumps with a cast metal impeller or a more generic aftermarket pump with the stamped steel version? How did you grind it and where?
If it is the stamped steel version, the ones I have seen have the impeller pressed on the shaft. serrated shaft and impeller hole so to speak. Check the clearance between the vanes and the pump body. Also look at the impeller back side that extends into the cavity of the timing cover. Is the shaft flush with the flat part of the impeller? You can press those impellers further onto the shaft and get more clearance at the back side if need be. Just do not want the vanes hitting the pump body or the shaft extending beyond the impeller.
Just support the front tip on a vice anvil or other hard flat surface. (The shaft tip, not the hub!) Take a large socket to fit over the impeller side with the hole big enough not to touch the shaft. A moderate tap of the socket with a hammer will move the impeller closer to the housing. Don't over do it. One tap and check how far it moved, check for installed clearance, repeat if necessary.
BTW, that is what I did to get my cheap aftermarket pump to have the same vane to body tip clearance as my old more expensive Stewart (Stuart?) supposedly high performance pump. Other than that distance, the pumps look exactly the same, down to the casting number on the body. And they had told me they specially make their own castings... Oh well...
If you have the Edelbrock pump, cannot help other than ask that you confirm you have the right model.
Gene