I'm certain the machine is design to keep the quill off the table to minimize damage. Having 5" of clearance with the quill retracted makes sense. The 5" is made up with the quill travel. You probably don't want to machine directly on the table. Put a sub plate on the table or use a vise.
From what I recall from using a Kurt power draw bar on a manual Bridgeport, running the spindle with the quill all the way up was ok. The Kurt's socket only moved down to engaged the draw bar when you pushed the button and raised when released.
Getting a scale for the quill like this one should help with accuracy:
http://www1.mscdirect.com/CGI/NNSRIT...MT4NO=12382059