Good day, Tung:
Thank you for the questions and the example.
First, yes, you do need blank lines around systems of equations, even if they are itemized.
Your transcription (including alignment) is readable and practical as far as I can tell.
Technically, the transcription attached to this message follows the Guidance for Transcription Using the Nemeth Code within UEB Contexts more closely, because it places in cell 1 the opening Nemeth Code indicator that will not fit on a line with text preceding spatial material, and it places on a line by itself in cell 1 after a blank line the Nemeth Code terminator following spatial material.