The rotational play in the torque converter is fine, that's entirely normal as that component is held on its axis by the shaft going into it, rather than anything inside the converter itself.
I can't really tell as I wasn't there to do the pulling, but pulling torque converters on a tranny that's sideways can be a real bear, so that may have been normal. Similarly, getting the damn thing lined up and re-stabbed onto the transmission without removing it from the jeep and standing it on its end is going to suck really bad. It can be done, it just sucks and will be a bit of an arm workout. Make absolutely sure that the entire converter including the snout that seats into the crank bore is below the surface of the bellhousing, so if you put a straightedge across the bellhousing it clears it. On the spare one I have sitting here, the clearance between the straightedge and the snout is 3/16". If it won't seat, try lifting up and wobbling the converter side to side and rotating it 1/4 turn or so back and forth as you push it into the tranny.
Remember to pre-lube the seal lip and the neck of the converter with ATF before installing.
How does the neck of the converter look? Make sure it's not worn/galled/damaged in any way and that the two drive slots that engage the gerotor inside the fluid pump on the front of the transmission are in good condition.