It is my recollection that for original M1891's the lowest elevation setting was 400 meters.
This will put the bullets about 14" high at 100 yards.
The only cure is to find a taller front sight
There are taller sights for Swedish Mausers, maybe one will fit. I put the taller front sight in the base and file it so it is one at 100 yards.
Elevation changes will be all wonky after that as rear sight is still graduated for 400, 500, 600 meters and those are likely 3 MOA, 4 MOA changes.
As for your group sizes, once you get the sights zero'd, it takes practice to get the group down. Lots of practice.
If I'm not shooting, I'm reloading.