When you say the starter screeches when it starts up do you mean when the engine is running or as it cranks? Also when you say that the teeth are engaged 2/3 do you mean all the time?

The teeth on the started are only supposed to engage the flywheel when the engine is cranking and retract when the engine starts. If it's not doing this it's usually one of the following.

1. Incorrect starter. When you go to the parts store just tell them you want a starter for a 70 Nova 350/TH350.

2. A bad starter drive or selinoid.

3. The selinoid is incorrectly wired.

4. Incorrect starter bolts. The correct starter bolts usuallt have a knurled section on the shaft. This allows tem to fit snug in the bolt holes and align the starter correctly.