I've got one of those same machines. I turned the contact wheel down to 2" wide, and I still use the 4" wide platen/wheels. It works well enough. For a while it was my only big belt grinder, and I made quite a few good knives with it.
I'm assuming that 3hp motor is 3 phase, which mine was when I got it. At the time, I got rid of the motor and installed a 1.5 hp 1725 1 phase Leeson. The 10" drive wheel that comes stock on those grinders is way too fast for most knife work, so I had to install a 7" "slow-down" drive wheel, then drill and tap another hole in the front of the frame where the tooling arm bolts on, to extend the wheelbase.
The best solution would be to get a 3hp capable VFD to drive it with. A couple years back, I bought a 2 hp three phase Leeson motor and installed it on the old Square Wheel, and put the stock drive wheel back on. Since I run it with the VFD now, I can slow it down to any extent I need.
The tracking wheel on mine was a bit sloppy, and ultimately I ended up balancing and crowning an industrial caster and using that for the new tracking wheel. It runs a lot smoother now.
I don't really like the tooling attachment method on the tooling arm (where the wheel or platen fits on) and now that I have a metal lathe, I'm planning on fabricating an adapter so that attachments are easier to swap out.