Hello everyone,
Again , thanks everyone for your time and expertise. Yes I moved all the drive components from one bike to the other and only have this situation on the red bike. Drive components I moved from one bike to the other include entire rear wheel, bb axle/spindle, chain ring, bb adjustable cup (non drive side), chain (red bike has original chain but to eliminate potential root cause I also put a new one on). the red bike functions just fine when I adjust the tight spot to 1/2" (loose spot to 1") so I guess that's what I will do. The only part I did not move from one bike to the other is the bb drive side cup. Was just trying to get it "perfect" but I guess things really never are. Btw regarding the hub I totally disassembled and cleaned and added 5cc of 20w non detergent oil and it shifts and runs like a dream . red bike is AW hub and black tcwIII (coaster brake). Interesting fact Is both bikes have rear hubs from may, 1963.