I went through the same contradiction about six years ago. Set up my CG-5 and fumbled around with it by blocking the tripod legs in a futile effort to achieve zero degrees.
I got lucky by running into a Utube video tutorial addressing this, produced by the informative Astro Shed guy. I also located the same Celestron instruction sheet you likely referred to. The method wasn't new, in fact you can find similar guides of how to calibrate the scope with a series of adjustments using the three tiny polar scope hex screws. The problem was the hex screws, trying to adjust them one at a time to move the clock face reticle was next to impossible. More on this below.
At this point in writing I paused and thought, maybe I still have the Celestron sheet on how to align the optical axis? Sure enough, I still had it and while reading the instructions I detected what sounded like a contradiction. At first, Celestron indicated you can use Polaris as your target point, but then went on say you can do this during the day by selecting a distant object. Then it said, "next, using the altitude adjustment bolts, incline the polar axis until it is level with the ground". I recall being confused by this statement as well, but now after re-reading the instructions, they really meant for you to raise (incline) the altitude of the polar axis so that the polar scope was pointing at your target point, whether Polaris or some object far away like the top of the pole I mentioned. After all, they did recommend pointing at Polaris, but if you were to do this you certainly can't put Polaris in the polar scope if your altitude is level to the ground (as Celestron instructs)besides which, as you indicated, you can't level a CG5 altitude to zero. Lowering the altitude is declining, raising it is inclining,correct? In any case, their explanation didn't make sense and as you go further into their step by step directions it's pretty clear they were likely translated originally. I remember having to read and re-read the instructions a number of times to get it down.
Calibrating the polar scope is pretty straight forward and I'm not the sharpest knife in the drawer. I took on astrophotography a couple years back and a lot of it flies over my head, many times I think the people trying to help you would really be helpful if they didn't assume you already knew the associated terms. The same with a video tutorial where the instructor is moving the cursor so damn fast or has a nervous twitch with it to the point you can't follow him. I like the paint by numbers method of instruction. Sorry to digress.
Once I got over the zero degree issue, the main problem was more mechanical, having to do with the really tiny polar scope reticle adjustment hex screws. First of all, there are three of them and you adjust each based on a step by step process as detailed in the Celestron sheet by using a combination of azimuth and altitude and adjusting the small polar scope hex screws. The pictured instructions can be confusing for the lack of clarity describing which is which, but where I found to be the most difficult was adjusting the hex screws, that is where the tip provided by the Astro Shed came to the rescue.
I found it nearly impossible to easily adjust the polar scope hex screws using a single hex wrench. You turn one out and leave it to turn the opposite one in or visa versa. The sheet warns you to be careful not to allow the reticle to become loose in it's position, it can fall out and that is exactly what mine did a few times. Getting it back in there correctly was a pain.
The Astro Shed guy recommended replacing the hex screws with appropriately sized and length hex head screws, longer ones so you can hold them between your thumb and forefinger. The size of these screws escape me now, something in the M6-M8 range, long enough you can pinch them. The beauty of the longer screws is you can now hold two screws at the same time and adjust them in the same manner as you would adjust finder scope screws, using one against the other. That way you don't lose control over the reticle and having it fall out on you. As you adjust one in, you are adjusting the other out.
The process is still kind of fumbly, but having the longer screws and clarifying the directions made the process much easier. If you don't have the same Celestron sheet I do, let me know and I can mail a copy to you, if I could scan it I would, but my desktop is in for repair and I don't expect it back for a week or two. However, as indicated before, I saw somewhere another polar scope adjustment instruction sheet and maybe a Google search would reveal it, it might have been produced by iOptron.