So I replaced my transmission and clutch and realized that I should just replace the rear main seal (didn’t’ have a leak, just wanted to replace it) since it’s already out. When I inspected the old one it was sitting in all the way pushed up against in the back so that’s how I installed the new one. Is it good? Or would it have to be exactly flush on that outer edge?

I believe I installed mine flush with the block. There is plenty of sealing surface on the 420a crankshaft though so it might be fine as you have it. I think I would personally fix it since the seals are only $4, but your choice. It just would blow to have it leak after hanging the trans back up.