I looked at your write-up and your rotors are on the outside of the hub! Stock Capri's have them on the inside. Also, the spacer is not matched to just the hub. The bearings are different also so when you replace them, you have to match the spacer to the new bearings. Mine went from spacer #12 to spacer #09 to get the proper preload. I also didn't see where you seated the seal and by what I saw, you installed the seal upside down. The "cup" of the seal faces inwards. And not to be critical but using a hardened tool (screwdriver) to drive in a race? A brass drift or an aluminum race installer ensures that the race isn't dimpled. I have the factory install procedure and they call for the greased bearings and seals to be installed into the knuckle first and then the hub & rotor assembly is pressed in.
Yes, the turned down hub is used to set the preload and is turned down to allow the bearing to slip off the hub. It is only turned down up to the radius of the shaft so the radius can allow the bearing to "center" on the shaft.
I was a frame tech & chassis mechanic for 30 years and I have all the tools like bearing separators, pullers, race & seal installers, an indoor workbench, etc.
After all that I have put into the front end with this project (new bearings, rotors, calipers, struts, strut bearings, inner & outer tie rod ends & ball joints) I don't want to mess anything up so I will get a new outer seal (must cut the old one off to clear the bearing splitter) pull the bearing and reinstall into the hub to ensure the seal is in place. I just don't want to take a chance that water & debris doesn't get in there and take out the new bearing while on the road somewhere.
One more thing I noticed that isn't in the repair manual...
When installing conical bearings in conventional, non-spacer hubs, the bearings are over torqued at first to seat the races completely and then they are backed off and set to proper torque specs. I installed my test hub without doing this first and the proper spacer was a #10. When I took out the spacer and torqued the bearings to seat the races, the spacer needed was down to a #09 so there was some change in the alignment of the races even though I had seated them with a race installer. This may have explained why the first time I did the bearings and set the preload, one bearing loosened up after driving on it a week.