1950s Magnificent Magnavox HI-FI Console issues

[Electronic M]

A file can't be physically too large. It can have too course or too fine of cutting surface.
Your best bet is to get one 1/2"-1" wide by 6-10" long rectangular file with cutting grooves shallower and closer spaced than mechanical pencil lead on down.

Bring a penny or some small piece of metal and ask to try it out. You should get a feel for what you need based on how fast it grinds the sample metal down, how smooth it feels, and how smooth the metal is afterwards....If you have done business with the seller before perhaps you could borrow it from him.

As for how much to remove use the old knob shaft as a guide...Once you have removed almost enough gently try to fit the knob, if too snug remove a bit more, check fit, and repeat till you have it. It is hard to screw up if you pay attention.
All of this should not be hard for you to figure out.
Also make sure you know which way it's going to be installed, and at what position on the shaft's rotation the flat needs to be (so the knob pointer lines up)...That should not be hard for you to figure out.