Pinion looks a little deep to me.

That is adjusted by the collars on the sides?Back lash is .008
As said it should take 8-12in pounds to rotate rear. You need an old school mechanically type torque wrench.
That is only true for used bearings. New bearings should be closer to 30 in/lbs
Ughhh you never use an impact gun to crush a sleeve. Thats a good way to ruin them. Get the right tools. A 4 ft breaker bar and the proper tool that threads into the yoke to stop it from spinning.
As said it should take 8-12in pounds to rotate rear. You need an old school mechanically type torque wrench.
this threaded tool is the one in the GM service manual that bolts to the yoke?