Should the gear on an oil pump to a 1980 XLH spin freely or just turn by hand when the housing is tightened down?

 

Don't expect it to spin freely. There is going to be a bit of drag felt.
But having said that, if there is any feeling of binding..... then the pump is out of alignment. You need to refasten the bolts again.

When you tighten the bolts to the pump, use a cross pattern as you would use installing a head gasket to get the pump settled in flush and in line.
pg