Can anyone tell me the reason for the spacers on the bolts? Expansion maybe?

 

the longer the bolts the more stretch so it hold the torque better I think that is right if not just disregard

 

They are there to allow for heating and cooling movement.
One thing I've found interesting when replacing these exhaust manifolds is most times the end bolts are bent badly. What's interesting is that after removing them they go straight. Leads me to believe that most exhaust manifold cracking could most likely be eliminated just by loosening the bolts till they straighten then retorque them.

 

I've seen where the manifold has shrunk a bit and the holes no long line up properly. So I heard the guy heated the manifold with a torch to expand the manifold into place.

Think about it the amount of heat these cast iron manifold must take on. I've heard of temps as high as 1400*F !!! Boy you know that manifold is glowing!