Yes, the belt is riding on the crown of the pulley, not on the tapered lower part (see the pics attached).
Re. slipping, if anything the tighter belt should have less likelihood of slipping, I would think. This behaviour is coincidental with putting the tighter belt on. Odd...
Edit: I checked the motor mount bolts, and they are about half-way along the adjustment slots. Lots of room to make the belt tighter or looser, if need be.