In bikes of that era, with micro adjust horizontal dropouts, less attention was given to perfect dropout fixturing during brazing than is with modern dropouts. After all the builder knew it had the micro adjust screws. So perfect alignment based on fully back in the dropout isn't necessarily an indicator of anything, but it should be fairly close.

The dropout is designed to use with the screws, and needs to have them to work as intended. The reality is that only one side needs to be adjustable, and if you're willing to put up with a bit of inconvenience you can use 3mm screws inserted through the slot end and short enough not to poke through. Adjust trial and error until they're dialed in and the wheel is straight, then you'll never touch them again. If there are problems with the thread on one side, it's OK because only one needs to be adjustable. Devise a stop for the stripped side, and adjust from the opposite.

To give you some perspective, these screws were in use for a few decades. All of us who rode in that era had them, and 90% of us had bent ones because of normal (rough) handling. This could be a pain, and many people stripped the threads trying to remove a damaged screw. One day I decided that since I never moved them anyway, I might as well cut them off flush at the back of the dropout. Later on many others followed suit, and no one ever regretted doing so.

Your RD touching the wheel in low gear, is most likely because of a bent hanger. Shift to a gear combination where the cage is vertical, now stand behind the bike and eyeball if the cage is straight up and down. I expect that you'll find the bottom in inboard compared to the top. Hanger aligning is an everyday job in bike shops, requiring a $50.00 tool. When you bring it in be sure to explain about the (possibly) cracked dropout, because it'll be easy for the shop to finish it off if he's unaware. To prevent damage to the dropout the hanger should only be straightened with a solid axle wheel in place to stabilize the dropout.

So that should get it so you can ride, but as others pointed out there may (or may not) be other alignment issues. I'd ride it and see how it handles before spending more to check. If it handles OK that's all that counts, but if you have tracking issues, or it's hard to ride no hands, you'll want it checked by someone who knows what he's doing. Most shops really don't, so ask around to find the right guy.