Evidence of groove damage of TT setup?

Most likely those records are damaged due to excessive play or careless handling by the previous owner(s). I have a few like that. You can try playing them with a smaller stylus cart. Sometimes a smaller stylus can dig down to the undamaged part of the grooves. Other than that, there is not much you can do.

Is my tracking too light/heavy or is the LP damaged.

I'm sorry, but how do you expect anybody here to answer that? All anybody here can do is offer up posssible reasons.

In addition to the possibilities you listed it is possible that:

1. your cartridge mistracks because it simply can't handle those passages
2. the album was poorly recorded and the distortion is inherent in the disc
3. some other part of your system is overloading. How loud are you playing it?

To answer your original question; you will have to make adjustments and see if it clears up, that is unless the mistracking has damaged the record in which case it will never go away.

Herman, I guess I was expecting possible answers such as: "Distortion in dynamic passages is never a symptom of improper tracking." or "90% of the time distortion during passages is due to groove damage.", etc.

I was looking for general guidelines.

I'm not playing it very loud at all so I don't think it's a systemic issue. I agree that I'll have to eventually make adjustments to see what helps but, was hoping to get oriented into the areas to look first; those that are typically the culprit in exhibiting these symptoms.

Play a few records with dynamic passages you know to be undamaged. If you hear distortion, it's probably an alignment (including VTF) issue. If not, welcome to the world of junk vinyl.