Will a 215/65R16 fit under a stock 98 Outback?

Yes, even 215/70R16 will fit without rubbing

1983 Subaru GL stock height wheels are a 15x7 4 inch backspace and tires are a 205/60/15 which I believe are just short of 25 inches tall although they do stick out of the fender so I think that’s why I couldn’t go bigger and I had to trim on the back of the fender. 

i put 215/65R16 on mine and i think i could put 215/70 on it. just with lift wheels went inside and front wheels rubbing stuff when turning wheels but thats because lift .