[leegreen]

1/16" clearance sounds like enough to me? As long as it does not rub I don't see any difference between 1/64" and 1/2". Just make sure there is no slop axle to spider pin that you might loose that clearance in corners

where does it hit the caliper? (picture?)
as suggested grinding can probably give you at least another 1/16

edit: but I do see your comment about the work to swap lugs!
Should be no need to remove axles to swap lugs though

I agree with joedoh, drums in the rear are fine for most of our trucks, simple, cheap, better e-brake.
For period correctness you could go drums on all 4, get some of those big finned aluminum '69 buick skylark drums for front. except those drums probably cost more than a disk conversion these days