Are you aware that the door is upside-down?
The knob should be below the center point, not above it.
That aside, the best way to deal with your stated problem is to fix the frame. You don't need to completely redo it. Just figure out which side of the frame isn't straight up and down, get a thinner replacement piece for that side, and put some spacers under the top end. Then fill in the gap with some wood filler and paint it to match.
Alternatively use a planer or something similar to shave off some depth at the tighter end of that frame piece. I've used an oscillating multitool for something very similar. Getting it flat will be tricky but it's doable.
Flip the door right-side up first though.