I don't think anybody has addressed your question about 1/8" below surface. While 1/8" might be a tad much, for sure have 1/16" to 3/32" to have plenty of material to remove for truing up the magnetic chuck.
While steel might hold more, you'll find aluminum will still provide plenty of holding and the steel dust is a bit less of a hassle to clean. For me, the aluminum is easier to machine than steel would be.
I built a 2-1/2" wide chuck and got 3" wide wheels for grinder (drive, tracking, & contact). Getting wider sanding belts more of a hassle than having only the 2X72" belts in stock. For my 2" wide blades I will grind a tad of the bevel first, not much, 1/4" to 1/2" wide area and only a few thou. Just enough so surface grinding the rest of blade gets full width with a 2" belt.