You will find a dizzy array of bushings at the farm store. The top link bushing is different than the bottom 2, but if you keep looking you'll find it, if you just want the 3 bushings. I would not run with the 'slop' on the pins, that's just asking for problems.
As another person said, cat 2 hitches are generally on bigger tractors, so you might overstress your implement with the more hp, but otherwise there are no specific safety problems. Well, cat 2 might have longer arms, lift higher, and so forth. Watch any pto equipment so it doesn't mess up the pto. And cat 2 normally is wider, so you might need a different set of stablizer arms, if you need stabilizers on whatever you are using.