You should dry to push your filter up more. There is nothing wrong with it touching the splash shield but its better the the filter be more up on the pipe rather then on the edge of it.

As far as the whole concerned.... you can either bend the metal down to fit the pipe or grind it off with a dremel or air gun. Then take a regualr rubber hose make a slid in it with a blade ...horizontally that way you open up the hose then put it over the sharp edges and this will protect your CAI from damage.

Some people didnt do the above and have tiny holes developed from continuous rubbing.