No, that's not right. It needs to butt up against the rig's skin for the weather seals to work. You'll find you get a lot of dust and dirt in the bathroom sink area when it's not properly sealed.
Many manufacturers skimp on the slide motor. They put in motors that can barely do the job, but don't have enough design margin to handle any degradation due to age.
But first, you might need to clean and lube your gear racks. RV repair places offer this as a service. They should also check if anything is out of alignment. Some slides use two motors and if one fails, the slide gets out of whack.
Then if that's properly working and it still doesn't fully retract, you might need a new slide motor. But before you replace a motor, check all the electrical connections going to the motor, because anything in that pathway will reduce the Amps it needs to do its job.
Years ago, my slide often needed gravity to help pull it in. If my slide was going slightly uphill, it would stall. So I had to find campsites that had some slope or somewhere I could pull onto a rise or a bump before pulling the slide in.
My fix was to add an emergency slide switch. Two #8 AWG wires connected direct to the house battery through a 40A Maxifuse and a spring return (momentary) rocker switch, which are wired direct to the motor. The existing slide switch is still in parallel, but the emergency switch provides the extra Amps needed to get the slide up and out of the drop-down dinette pocket. Then I use the regular switch to pull it the rest of the way because it's safer when it pulls up against the wall.
And now a little warning: You need to find out where your manual slide retraction drive nut is if your motor fails. Somewhere on your motor's gear box is a hex nut you can operate with a wrench. Mine was a 1/2" nut, so I carry a ratchet and 1/2" socket -- just in case.
I later bought a cordless ratchet but it didn't have the torque it said it has, so I need to find one that actually can do what it says it can do.
Worst case scenario was where someone had to drive back to the dealer with a stuck slide fully extended out, which is a very, very bad idea. Not only is it dangerous to be overwidth on the road (and without a DOT wide load permit), they might have damaged the whole slide mechanism.
So even though a ratchet might take half an hour to pull the slide in, it's always good insurance to have one with you.
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