Joined: Nov 2016
One thing I'd do is slip it out and look for 'wear rings' or pitting, when you're replacing the rear seal. If it's just a little bit worn, you can probably clean it up and polish it without any trouble. Also, just wiggle it all around and see if there's any slop or wobble to it. The thing should be free to move in and out a little as the rear axle goes through its travel, but it most definitely should have no play when it comes to rotation. Just horizontal with the shaft. If it's shiny smooth, and doesn't wiggle, you are probably fine. You're also right that it should not stick out 'a lot' because without enough of the shaft engaged, it will develop problems, and very likely warp the driveshaft while it's at it. IIRC the shop manual does list how much free play it's supposed to have, which will help you figure out if it's too far out.
I smile a lot. It makes people wonder what I'm up to...