Clamp the indicator to the machine shaft.
Line up the motor shaft as good as possible by eye.
Indicate on the motor shaft near the end and then three or four inches further back.
Adjust the motor to get the two readings the same; that is the same reading at the same position on the motor shaft. It does not matter if the motor shaft is not true to the machine shaft, if the TIR is the same at the end and further back the two shafts are parallel;
Now you have the shafts parallel you can figure out what direction to move the motor to get them aligned; if you are lucky it will be a case of shimming it up the same amount at all the mounting bolts.
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