Flywheel ring gear

Hello all. A few weeks back I tried to start my 97 240 and it made a grinding noise. I tried again and it started just fine. Fast forward 1 week. I try to go to work in the morning and I get the same noise. Try again and again and the same noise. It doesn't crank or start. I rip off the factory starter (assuming the bendix isnt engaging or something) and have a look at the teeth and the ring gear. The starter looks a little worn so i buy a remanned, and the flywheel teeth all look fine. Install it and it's the same noise. I roll it down the driveway in gear and try starting it every foot. No luck. It does push start and drive just fine though. I rip off the new starter and give a closer look to the flywheel. The ring gear on the flywheel has play in it. I can move it back and forth horizontally a small but easily noticeable amount. Is this the grinding noise and why it isn't starting? Thanks!

tl;dr flywheel ring gear has horizontal play. does this cause god awful grinding noises and prevent the starter from engaging?