I use two parameters to check if a reed is set up the way I like it.
The first is the distance I can bend the reed before it chokes, the second is the amount of air that escapes along the reed while it is choked.
I try to get the isolated reed to bend at least a quartertone, maybe a little more, before it chokes.
When it chokes there should be as little air leakage as possible. The reed will never fully close the slot, but there is a big difference between a howling wind and a soft breeze.
I like my reeds very straight and the gaps very low, so arcing usually means getting rid of the arc the manufacturer has put on the reed.
I have found that I get the best result when the reed is dipped slightly at the point where it leaves the plate, near the rivet, and comes up straight after that.
Sideview of a new reedplate (click to enlarge).
Sideview of a plate after arcing.
Narrowing the slots will very likely have bent your reeds out of shape. The reed will probably be bent down into the slot, curved around the edge of the plate.
When bending it back up, make sure the reed doesn't bend back at the rivet but just a little past the edge of the plate so that the curve around the edge, causing the reed to dip into the plate, remains in the reed.
The curve at the edge of the plate is very small and hardly visible, but the effect on the leakage of the whole reed can be dramatic.
After this point I try to get the reed to be as straight as possible, always aiming to get as little leakage as possible from the reed when it is choked.
All this is a matter of trial and error, so I suggest you get a pair of old plates to practice on before you tackle your favorite harmonica.
Plate after embossing and arcing .
Plate after embossing and arcing.