Welcome to the forum longjohn, glad you joined us.
I have never seen one that the sprocket has to be right up against the spokes. Having the sprocket against the spokes is not a good ideal (you want to have the rubber donut between the spokes and sprocket). You might have to move the motor over if that is the case.
Some have had bad luck with the china motor, I have had very good luck with years and thousands of miles.
The rag joint set up is one of the weakest parts of these kits, there are other options.
I still use the rag joint set up but went with a HD wheel with 12g spokes. There is also hub adapters that will eliminate the rag joint. And you could always go with a SBP shifter kit.... Sick Bike Parts LLC - Motor Kits for Your Bicycle