Update:

All seems to be well now

One of the wheel reflectors was cracked so i went to Halfords to see if i could get a similar looking replacement. Even i could probably fit one of them without incident.

As i wheeled the Curve to the cycle spares, the young sales assistant came over for a chat and i told him of the problems i had. I hadn't even thought about getting Halfords to set the bike up so when he offered to take a look, i said i only really came in for a reflector but he's more than welcome to see if there was anything obviously wrong.

I was totally chuffed when he put it on their rig and said not to worry, he wouldn't charge me!

Anyway, he was pretty suprised that the chain touched the frame even after he'd aligned the wheel correctly. The only solution he could suggest was the same as mine- spacing the frame out with washers.

Unfortunately he couldn't find anything the right size so i popped home to get a handful of washers and left the bike there. I was delayed because i stopped to attend to a lad who had just crashed his bike by getting his umbrella and then his fishing rod through the spokes

When i finally got back to Halfords, the lad had adjusted the front brakes and was waiting for the washers to do the spacing on the hub. 5 minutes later, no more chain rub, aligned wheel, properly adjusted gears and correct chain tension. He did note that with the extra washers, the wheel nut would now not cover all the threads so to be careful tightening it in future.

The only thing not fixed was the reflector- apparently all the cool kids take them off and bin them

Big thanks to Halfords. I know they get a bad rap but i couldn't fault the lad and i got my bike setup for free, he kept to his word and refused to charge me.

Matt