For maximum space between the prop hub and cutlass bearing, the maximum distance should be no more than one time or 1.5x the diameter of the shaft, but there also needs to be at least 1/4" gap to allow water to circulate in to cool and rinse the cutlass. I read both somewhere, but don't remember where.

The reason for maximum distance is so any slight imbalance or debris doesn't whip the shaft out of true.