Is there any practical difference between a racist and someone who doesn’t acknowledge racism when it is pretty clear?

Depends on how you define "pretty clear."

There's a wide range of behaviors and existing institutions that are labelled as "racist" today that would never have been as recently as a few decades ago. Is opposing decriminalization of certain drugs racist? Is opposing affirmative action programs as implemented a few years ago racist? How about advocating for increased policing or longer jail terms for property crimes? Or more rigorous border enforcement against illegal entry? Or even that colleges should still use the SAT, or allow buildings to be named after Thomas Jefferson?

Not everyone in the Democratic coalition would consider some or all of those things racist - but every one of those things would be considered racist by someone in the Democratic coalition. It would be very hard to rise to any position of leadership within the modern Democratic party if you believed that all of the things I mentioned were not racist. So it's not surprising that Democrats are losing ground among groups that hold more conservative viewpoints on these things who were formerly in their coalition (like union members or male Latinos).

Can the Democrats find room in the party for these folks, who agree with them on a lot of economic positions but which their hardcore progressive base think are racist for believing stuff like I listed above?