In this photo you can see that at A it is in, it is in at the fender, and in at the grille. At B it is out, so the alignment between the side cover and the grille needs to be changed here. As I said it's been a long time since I worked on a 37 but I believe there is no way to adjust this as the hood side just fits up against the grille on rubber pads. If this is the case, are the rubbers in place? The hood side or the grille may simply need a little tweeking at those points BEHIND what you see in the photo where they meet. Bending out the grille just at the lip where the hood overlaps it, to push out the hoodside. And opposite at the top, just tweeking it a little bit where they touch to make the hood side better fit on the outside.
At the point marked C, it may close up once the bottom at the grill is brought out. But if it doesn't it may also need a little bending of the side to make it fit match the fender.