What year are you working on? I have a 67 with AOD and switched to a 69 shifter housing and everything lined up. If you are using a 67/68 shifter, then you should have the light on in drive while in O/D and then light on in 2 when out of O/D. The shifter should let you adjust for this.
68 with console. The guys doing the work tell me that this is just how it is. You are saying that if I replace the shift indicator with a 69 version, that I will see the correct gear lit up? Sorry, not techie guy at all. Maybe I need to take some photos.
When the trany is in neutral, the rod or cable should be adjusted so that the shifter is also showing neutral, the shifter throw is the same on the AOD as the C4, when you shift to drive, the distance should be the same.