I think this might be a case of there just not being enough polygons, because what’s there is trying to make up for the new vertex points created by the knife project although this is more of a guess. Try it with a higher poly object and it’s worth checking out if Speedflow can help you in this project https://gumroad.com/l/speedflow
You can do but you could also try using smooth subdivision (mess around with the values in the panel when you use this) on the shorter edges of that cylinder piece. It creates an area with denser polygons but I’m not sure if that will matter though if you don’t plan to use a displacement modifier down the line. I should’ve thought of smooth subdivision earlier, it’s pretty useful
You don’t have to model with one if you have enough polygons! Also I hope that works, otherwise there’s also just trying a bit of vertex pushing/pulling but that probably won’t solve it since it’s typically something you need to do complicated mesh editing to fix otherwise but I’m not sure what edge loop setup this would need to fix without messing around with it
I do have another question about Blender - is there a way to do a render which results in looking like the orthographic view you can get in the viewport, and not the perspective view ? Maybe changing the camera lens in some way?