Just started my first build and have hit a snag fitting the BBSHD into the bottom bracket.

The bike is nearly new hard tail 29ER from Aldi in Australia. It is a Crane frame. No model number, but details are here...


First issue is that it was very tight sliding through the bottom bracket. It would barely move. I resorted to using the fastening ring to pull it through and managed to get it in place after a lot of effort.

The issue is that it is touching the chain stauy. See photo. It looked OK as I was doing it, but worse in the photo.

I think I should pull it off and add some spacers (supplied in the Luna-mate/luna cycles kit). The trouble is now that it is so tight, I don't know how to get it out. So my questions:

Q1: Do I need to add the spacers. It is in place, but touching the stays? (I think yes).
Q2: Any suggestions on how to get it out other than pulling and wiggling. - Haven't tried yet but I know it will be at least very hard.
Q3: I read elsewhere (after I put it in) that in this situation it is better to open up the bottom bracket hole with a Dremel or similar. Any suggestions?