Sure you can cut spaces into the guards. I threw away the right-side one about ten minutes after setting it up, what a pain for changing belts. Just keep your fingers out of there.
I also cut away a good portion of the guard over the top roller, so I can use it like a contact wheel for hogging profiles.
Yes, you need to push into the belt enough to see it curve a little. I convex whole bevels this way. I leave the platen on and use the area between it and the top roller for a fairly subtle convex shape. Removing the platen will allow the belt to flex more and give a "rounder" shape to your bevel or edge.
If you decide to grind flat bevels or do profiling on the platen, do yourself a favor and mount a new face on it. It's not real flat to begin with and is soft as heck. Meaning it gets worn into a weird shape quickly and will drive you batty. The new face can be hardened steel or ceramic tile cut to shape and JB-welded on. I use a piece of fireplace glass from USAknifemaker.
Forget the Sears belts, they SUCK. Order online from the Pop's or SuperGrit or Tru-Grit. I got some AO belts from barbcat on the bay that are pretty decent. Either way you'll save money and lots of aggravation over the "Craftsman" brand belts.
Enjoy! It's a good little machine to start on. Not a pro grinder, but it does work with a little tweaking.