Sounds the same as the A-904 transmission in my 1969 Dodge Dart, indeed same as my 2002 Chrysler. The larger outer splined shaft which sticks out from the front pump is stationary. A smaller inner shaft is turned by an impeller inside the torque converter (TC). You have to keep rotating and wiggling the TC until it fully engages, which is 2 drops past steps. When correct, the TC bolt-up pads should be 1/2" or more below the bellhousing face (older Chrysler). I didn't know this when a neophyte reinstalling a rebuilt transmission in my 1969 Dart and just kept tightening flange bolts until I stripped a large tapped aluminum hole. Eventually, it settled after driving so could bolt it flush. I don't know what the correct distance is to verify correct seating in my M-B transmission (never touched), but should have a similar spec, and don't force things like this once dumb-kid did.

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1984 & 1985 CA 300D's
1964 & 65 Mopar's - Valiant, Dart, Newport
1996 & 2002 Chrysler minivans