They rotate due to tork. Rotation is normal. Define dropping. Pinion angle is actually set a little high to keep from binding/breaking u joints under heavy acceleration. Define clunk.
Save yourself the trouble and use oem bolts. The dorman are weak. I have had to remove 3 broken bolts from my block... Also do not use any kind of washer because the starter will walk and your starter will not properly mesh with your flywheel and will eat it up. Then your removing a trans.