OP, there is an old reloading trick we used to use when loading for rifles such as the one you have, with excessive freebore.
PARTIAL NECK RESIZING, instead of full length or even just the length of the neck to the shoulder.
You don't mention whether your chamber was cut with a reamer or if you're using an existing chamber and set the shoulder to accomate it.
Many take off barrels will have chambers reamed on the large side and that includes the necks, which expand to much IMHO to the parameters of the chamber.
It's always good to get the bullet ogive as close to engaging the leade as you can, without actually jamming it into the leade.
From the sounds of your mag length, you're still going to have appx 1/4 inch of freebore.
This means you have to keep your bullet as close to the axis of the bore as possible, before it enters the leade.
One of the easiest ways to do this is to Partially Neck Resize.
This procedure will work quite well, with the long/heavy bullets, you should be using with that twist rate of 1/8.5.
The unsized neck portion will fit into the chamber and keep the bullet aligned with the axis of the bore.
The long bullets will take up some powder room in the case but they should also be long enough to hold the bullet aligned until it's either in or very close to the leade.
As long as your leade surfaces aren't eroded to badly, this should at the very least shrink your groups and at best solve your accuracy issues.
There used to be a very good reason for designing cases with long necks, that shot long bullets.
With today's tight tolerances and great machining capabilities, we've been able to bypass such things for the most part, until we start using early designed cartridges.
The 7x64 is an excellent cartridge IMHO.