You don't align the stab from you bench. The stab needs to be parallel to the wing. Set the plane level and stand behind it with you eye at the level of the stab. Looking on both sides the stab needs to be level with the wing. If you try to measure from the bench as you're doing you'll more than likely wind up with a stab that is out of alignment. Look at the attached diagram. While this shows a high wing plane, the concept is the same for low wings.

And yes, you change the stab alignment by sanding the fuselage to level it out.