Just called technical support from AllTrax. First of all what a pleasant experience! Greeted well, the CS rep listened to my entire problem and configuration, my symptoms, and then responded in a very educated fashion.
He said that contactors will have signs of pitting, that they're rated for 10,000 cycles and with these cycles pitting can occur. However he agreed that the pitting can cause issues of the relay loosing its connection and failing as in my case and recommended hooking it up to to pack voltage and making the ground to close the circuit. He said thats how they make these work and hook them up, but Zero could be doing something different. Also he said AllTrax doesn't make the Contactor, only the controller. So it appears they just supplied them for customers.
As for putting in a better / more durable Contactor, he asked what my controller model was. He came back saying its a 500 Amp and that I'd need at least a contactor rated at 400AMP continuous. I read off the spec of the contactor that was in my zero, where it said 48VDC 200A and he said I should upgrade to the 48VDC 400A contactor. So I'll try to hunt one of these guys down here soon.
Also the CS guy took the time to explain what all the settings ment in the AllTrax controller software. There was only one setting that I was able to change since the others were setup either max or correctly and that one was the "Max Output Current" which stock was 90% and we turned that one up to 100%.