J_J, that looks a little loose. The orientation is correct for checking. I measure my hand as about 3 inches wide. I would drop it to a little less that 4 inches since my hand is slightly small. If what you have runs smoothly and does not jump off the drive sprocket or gets one of the drive sprocket teeth hung up on the chain (this has happened to me) while trenching/loaded then you are probabably OK. Of course yours is for the 1445, maybe the clearance requirement is different. I think you should call Power Trac to make sure.
I have removed the chain to replace the drive motor and drive sprocket. I did not break any links, just removed the bolts that hold the front/idle sprocket support brackets in place. This is a two man job as the chain weights about 75 to 100 pounds. I can pick up the chain, but not hold it in place while installing bolts. I would guess that you replace the chain as a unit, although the teeth are bolted on to the chain and can be individually replaced.