Rando bags are typically sized for the frame+stem.
Seems like a raised or slightly taller stem would work with your modified rack support. Be sure that the front brake function is not compromised! Moving the bag forward might give you room, but generally the bike steering works best when the bag is close to the head tube.
Lack of a decaleur could also be a problem, since the bag won’t be solidly attached relative to steering motion. Check with @
gugie for his decaleur approach. He’ll be especially thrilled that you’re doing this on a Raleigh Grand Sports.