1/4" should be ok.
From what I've learned, the engine basically rotates a bit on the mounts so the rocker covers mostly just move up and down under the cowl. One of the sources said that 3/8" side clearance is the target gap, but 1/4" should be just fine. If you have 3/8" right now and nothing's rubbing, I think you're right there with everyone else and should just move on. As for the cooling, if the baffles are sealing correctly, or you're using a plenum, then this area should be low pressure anyway and any opening would have a minimal affect on the cooling air flow.
I removed the horizontal hinges last night and put the cowl back on this afternoon. With no strap, or anything else, the sides sag out a bit. So, I'm going to make a backing strip covered with packing tape and cleco it onto the bottom cowl where the hinge was. Then use tape on the edge and outer surface of the bottom cowl to make an epoxy dam and prevent myself from gluing the halves together. Then I'll put it on the plane with the top cowl on. There's a lens shaped gap between the two cowls due to the sag that about 3/16" at the widest. I'll then fill that void with flox. After it cures, I'll sand a scarf joint and glass it over, then install the Milspecs except at the front and around rocker covers, which will get nutplates. This will get me 1/4" at Cyl #2 which will make me very happy, and I'll move on.
I'll post pics etc along the way. Seems others have had similar problems.