The belt should ride just slightly above. Washers would help protect the weights from getting jammed under the sharp edge of the ramp plate. This would gouge them and possibly stick the pulley at full travel, it happens when you notch. To combat it people have run oversized weights, or I suppose limiting washers.
The size of the windows or how far into the pulley wall the ramps run has nothing to do with it. Sounds like it was done right. Its just that getting the weights out that far will get them stuck or cut. You could try rounding the edge of your ramp plate for piece of mind.
As for the sound... Beats me. So many things could make that sound.