2001LC
SILVER Star
Hard to see much in picture. But some space is normal. The bolt is clamping in a center metal bushing' housed in rubber (the shocks bushing). But as @abuck99 said: zero play once bolt torqued (72ft-lbf) in. Bolt holds bushing of shock, from moving in or out. The rubber of bushing is likely shot. This would account for your up down and side to side play. As @suprarx7nut mentioned bolt is a one time use bolt. If in good condition and must reuse. Use a medium thread lock sealant.Is this much space normal
With OEM shocks, you can just press in new bushing. But with aftermarket shock, fitment of new bushing may be an issue. If replacing shock, unless they're new. Best to replace both rears.
Normal space of rear lower shock bolt.