If the chain is still under tension in the small/small combination, and the long lower stretch isn't rubbing against the chain wrapping around the upper jockey wheel, then you're all good - this is as slack as it's going to get, and as others have said, you're not likely to be using this chainring-sprocket combination in the wild. But if you're concerned, you could likely remove a link or two, as long as it doesn't strain the RD in the big/big combination. Chain "stretch" is a separate unrelated issue. The chain seems worn based on your measurements, so it's likely the cassette is too (there's no real way to evaluate wear just by eyeballing) - since the chain and cassette are likely worn in together, I would just jeep riding them until the shifting starts to deteriorate and/or the chain starts skipping, then replace both at the same time