I have two cars fitted with these devices and both rattle when the car is pushed but run with no discernible noise or vibration - at least not above the cacophony of the engine.

1)             The minimum clearance is that which will allow free operation of the coupling and what the maximum acceptable is, pass, but 0.024" does not seem excessive - it depends on how much of a perfectionist and how deep your pocket is. What is important for good operation is a straight shaft with little or no imbalance, a bent or out of balance shaft will ease vibration and excessive wear. I use two jubilee clips joined together with the screws opposite each other to retain the large end of the grease bag because I found using only one clip causes vibration. The grease bag is essential for a long wear-free life, as otherwise all the lubricant will end up on the underside of your car or on the Queen's highway. It should be filled with a molybdenum grease as used in constant velocity joints.
2)             The only place that it could be shimmed is between the spherical face and the blocks, which I would consider a very temporary bodge.
3)             As far as I'm aware only standard blocks are available.
4)             Metal spraying is the easy bit, it's the machining before and after that is the problem unless you have bottomless pockets.
5)             Carden blocks and pins are (or were) available from the well known Seven suppliers e.g. The Seven Workshop, Austin Seven Service.  Also try the little red directory of suppliers. New Carden bodies were available but I think the supply has now dried up.

Assuming that your shalt is not bent or out of balance, you will need a lathe to check the former and it is unlikely to be out of balance unless some clown has added or removed material asymmetrically. Wear can make itself evident by movement in one of two planes, see sketch, a) vertically, and b) laterally dealing with one at a time
    a) Vertically is a result of wear between the pin and the blocks (can be cured by a new pin and new blocks) and between the blocks and the slots in the body I don't think new bodies are available so search the Autojumble stalls for a better one, if you have the resources or finance have the slots built up and machined to size.
    b) Horizontally is a result of wear of the spherical faces of the shaft and bore of the body, remove any barrelling of the bore by boring out in a lathe. Build up the spherical ends of the shaft by welding then machine spherical faces to give a nice sliding fit in the body.

Of course, if the end of the shaft is beyond repair chop it off and graft on a Hardy Spicer coupling but make sure you get the length correct and the assembly must run true. I have done one of these on an unsalvageable shaft using the end off a Triumph Herald shaft, which uses the same Hardy Spicer coupling as a Seven. The ends to be mated are machined to the same diameter and a 4" long thick-walled sleeve machined and shrunk on. I didn't weld it for fear of distortion causing run out.  Unfortunately the sleeve was only 1/4" wall and it slipped. The Mark 2 has a 3/8" walled sleeve and has given a couple of years of service.

Dave Mann PWA7C with many thanks