OK from memory, so bear with me. The shift lever connects to a roughly triangle bellcrank with two shift rods, and a detent with a spring (for neutral) in the center. There is a scribed mark either side of the center. Gears should engage when those scribes align with the spring. That is the proper adjustment, if all the gearcase components are good.
In the gearcase, there are two thrust washers. they can get worn. Replacements were cheap. Not sure now. In addition, the shift dog can have it's "ears" rounded off, as well as a round off of the gear-to-dog area.. All cause a gear to slip.
Most of those gearcases have symmetrical gears and shift dog. You can use either gear for forward, and either side of the dog. Try to pick out the best gear and dog ear surfaces for forward. Also, the shift cradle can get worn. It is a soft piece of metal that slides the shift dog back and front to engage the gears. They were cheap to replace.
On my '58 fat fifty, the shiftdog and gears were worn, I could only get forward or reverse, but not both. That bellcrank adjustment (all the way forward) gave me a solid forward and neutral. Just make sure you approach the beach or dock slowly, and save room for drifting.
