The face plate should made to be near dead flat and near dead true for run out, the wheel need be easy to dress during the operation. I have done both ways. Checking flat perhaps with blue-in to a known flat something.
The wheel OD is more rigid as to the spindle and the wheel itself so if having a compound base for easy swing to 90* I would swing and use the wheel od.
Side wheel grinding seemingly easier because the machine is already there and so would make a cross-hath grind with using an under-cut wheel with only perhaps 1/8 side grinding face and dressed to that flat (not just dished). This is fine but harder to set-up and as the load increases with more part engaged, the the stress to the wheel increases.
One or the other you need swing and tilt to make it right. Tilt might be done with using a shim under the work head. The holding taper ID and OD bug free and clean, a locator mark on the work-head and taper so to be place the same 180 spot at every use. The chuck and any fixtures used also having a line up mark so able to take off and replace not a loss of true.
I like to swing so using the wheel OD in most cases. This for a more solid grind and moving to dress easy. Agree with only .0005 (take) additional dress may not be needed.
In a shop having a number of machines an arbor or device ground in to one machine or work head would not run true on another machine, so should be numbered for only that machine if needing very close parts. Even brand new machines and new arbors would be way off for close work. Perhaps a tenth or two off in the machine taper and then a tenth or two off in the arbor face and another in the arbor taper would make close work impossible.