Not sure how to word it. My rear wheel rotates a bit before catching. If I put the rear brake on, I’ll get maybe 1 degree of rotation before it stops. I don’t have anything to compare it to and google didn’t help as I don’t know what to search for
Are you referring to the engagement of the free hub body? Lots of different manufacturers have different systems, pawls, ratchet etc. They all engage differently. 1 degree sounds ok some are 3 and even more.
If your wheel is moving with brakes applied but disc is not (and it's loose) you appear to have found your problem. Correctly torque the brake disc bolts and check carefully before a big ride.
So that fixed it. Bit amazed they don’t use shoulder bolts or anything. The holes are bigger than the threads, so it doesn’t take much for the disc to move. Is this common?
Yes, fair amount of hole clearance is normal. One tip is with the bolts slightly loose, rotate the disk clockwise against them like you’re braking then tighten.