Yes, already can be used with the past simple where time is mentioned. Already is one of the time adjuncts (along with recently, once, before, this morning, and others) of which the Cambridge Grammar of English (p615) states:
Some time adjuncts can be used with either the present perfect or the
past simple depending upon the speaker's/writer's perspective.
With this group of adjuncts, if the events are considered as happening
at a definite point in the past, then the past simple is used.
In writing fiction, 'this' and 'that' can be used very effectively to connote different things. They are functionally equivalent, but the closeness of 'this' and the distance of 'that' can be used as tools.
'This' can be used to connote how close a thought is to a character, while 'that' can be used to connote how far away, or unimportant a thought might be to a character. Ex:
"I remember, because that was the day before Grandpa died."
"I remember, because this was the day before Grandpa died."
In the first case, the subtext is that this event might have meant something to the speaker, but that he holds it somewhat at arm's length. In the second case, the subtext is that this event might have meant something much more emotional and personal, and that it is an event that still moves him.
All because the author used 'this' in place of 'that'. It is subtle, but powerful. Readers pick up on this, even if unconsciously, and it can make the story better for them.
Conversely, if a character is telling an anecdote about something that was troubling, using 'that' rather than 'this' can connote how much the character wishes to not feel close to that experience.
It can also be used to make the time frame seem more immediate. If a narrator is speaking about past events, 'this' often puts the reader into the scene directly, while 'that' often makes it feel like something more from the past.
Best Answer
"This" and "that", much like their counterparts in most other European languages, indicate relative proximity. "This" refers to a thing that is literally or figuratively "here", as in "within reach" of the person. "That" refers to a thing that is literally or figuratively further away, but "within view". "At this time" is thus normally used when referring to the present time, and "at that time" is used when referring to specific past or future times.
HOWEVER, "this" can also be used to refer to something being discussed in the present context, even if the subject of the discussion is far away in place or time. "At this point in time" or simply "at this time", then, could be used to refer to the particular point in time that is central to the discussion. Similarly, one could point at something they're holding in their hand and refer to it as "that". So, more generally, "this" is something central and implicit in the statement; "that" by contrast is something more separate or which must be identified by location or time.