Thank you all for your quick responses.

I'm going to try again tomorrow. The spacers should all be in order, I took pictures of the rear wheel assembly before I took it apart.

Still, I think it might have to do something with the rubbers/ the sprocket assembly. It (the sprocket assembly) rests upon the "center" of the wheel (the hole where the axle is supposed to come through) rather than 'sinking' in? I've been looking at videos on youtube for the past hours and on all cush drive replacement videos, they can stomp it in / let it sink in with ease but I cant do that on my bike. Maybe that is something specific for the MT-03?