On AC the electrode is supposed to form a ball end slightly larger than the diameter of the electrode, you can use the +ve/-ve balance (aka cleaning) to fine tune the formation of this ball.
You also need to make sure you are using the right electrodes, ceriated, lanthanated and zirconated are the ones generally used for AC, pure tungsten will also work but has a lower current capacity and thoriated won't work properly at all.
That also looks like a very thick chunk of aluminium. Because it has such a high thermal conductivity if you don't have enough current then you just won't get a molten puddle to form at all as heat is conducted away as fast as you can put it in,m unlike steel where you can usually at least form a puddle regardless of material thickness, even if you don't get much penetration. For a 200 amp machine I would suggest that material around 4mm thick will be a good place to start in terms of getting a feel for the process.
A fairly wide arc for AC compared to DC is normal for TIG. If your machine has frequency control you can increase the frequency to tighten the arc.
