It doesn't matter what target you are using. You need to be able to shoot consistent types of groups before you can consider adjusting for zero. If your zeroing at 50 yards and aiming dead center and hitting dead center at 50 yards, what is actually printed on the target means nothing.
You are on an 8x11" paper at 50 so that is good. Easy to adjust from here provided you can hold a good consistent group. Even though your windage is off, it is fairly consistent (unless if there were another 50 rounds off the paper to the right) and you really can adjust for windage at this point. However your elevation correction is more complicated. If you were to actually call all of those shots on paper an actual group, the center of that group would be about dead center of the paper. Is it possible that it is the weapon or ammo or both? Yes it is possible. Best way to confirm this is to let someone who is a good shooter fire the weapon. Is it possible that you fundamentals are lacking? Very possible and most likely the case.
Setting up at 25yards is a good idea, not because of the target, but perhaps you will be better able to see your consistent point of aim throughout the trigger press and you might tighten up the groups considerably. However note that USGI specs for this platform is 4MOA. So at 50 yards you are looking at 8". In reality these rifles shoot much better, but you would at least be shooting Center of Mass hits at 50. Not great but a starting point. So bottom line, forget about what target you use, it doesn't matter. Try to get someone else to shoot the rifle to confirm if it is the rifle or the shooter. Get some instruction on proper application of fundamentals.