Is it normal that my servo arm is practically scraping the wall?
The servo holder needs to be turned 180° for slightly bigger servos like yours.
Have you tried? It should give you the space you need.
I had a same issue. You can try this modified holder: https://github.com/2ndalpha/3d/blob/master/OpenRC%20F1/Servo%20Holder%20Thin.STL