Hi Dianne,
The headstock bearings on my South Bend also have a few thou play, but if I try to tighten them up by playing with the shims, the bearings start to run a bit warm. Plain bearings need a little clearance to work. I find I can do anything I want with the machine.
Some people have made a carriage and cross slide for a jeweller's lathe for really small parts. Some time ago, one of our TSME members, Bill Huxhold used a binocular microscope with a jeweller's lathe so he could see what he was doing when he had to make some small parts. He brought the setup to one of our meetings to show us. There are lots of different ways to do what you want.
Richard Trounce.