Radial grooves are not the best, but the bell would work as intended. Grooves mean you will probably wear irregular patterns into the shoes but it will still grip.
Pads do look glazed, what oil are you using, maybe try a different type? You could also do a little cross hatch sanding on the bell surface with some 240-320 grit to just clean the shinyness off the bell and give a little more bite, sand the pads and try bedding them back in.
Side clearance on the bearing is ok, Ideally as long as the rollers can't walk too far out of the rod you are all right.