First of all, I hope you ordered more than one ribbon gauge. You need several sizes to see what the fit is. It isn't a "one size" deal. You need gauges from about .003" to .008" at least. I have them from like .0015" to .010". What size did you get?
Second, you check skirt clearance at right angles to the piston pin. So, the gauge will be placed on the skirt. See pic below:
piston.jpg
When checking the skirt clearance, I slide the wrist pin into the piston (
DO NOT put the circle clips in, OR the rings on the piston), hold the piston upside down at the top of the bore, then hold the ribbon gauge to the piston, then slide it down. You need to do this in at least 4 places. So, like, 12 o'clock, 3 o'clock, 6, and 9. Make sense? You need to find the gauge that lets the piston slide in with some resistance, but not excessive force. How do you know what is excessive? With no experience, you don't. This is why I don't like people overhauling engines that have NO experience doing so.
For the measurement, you use the info in the book on the chart at "piston". I still don't understand why the book gives two different points of measurement on the piston.... it's the only book I've ever seen that on. Instead of trying to figure it out, I'll just tell you, the skirt clearance should be about .004" to .007" For the record, you have a new bore, not a used bore, so you will use the specs accordingly. You also have a new piston. Throw the old one in the junk pile. You are done with it now. It should never have went to the machine shop. Hope they didn't use it to fit to the bore.
On the rings. You have to check ring end gap. The book does clearly state how to do this. This clearance MUST be checked BEFORE the rings are installed on the piston. Make sure you do it. Read the part on how to check them, it should make sense.