Thanks for the replies !
@ alfeng -Yes it is a freewheel, since I have removed it for regreasing the rear hub. Unfortunate but true, Schwinn, Gt, and Trek base models are still using the freewheel rather than the cassette which seems to be the standard norm for all new bikes.
@ - qdc 15 -Well the play is side to side and this is by feel, noticed this when i was removing the freewheel from the hub.
@compybob - I have the same 2010 Trek which you have mentioned and it is a 14-34 freewheel, you would be surprised that even the spokes are not stainless steel, they are just plain black coated steel. Lol ! even the Bottom Bracket is a vp instead of a Shimano.
@oldbobcat - I do not mind the float during coasting, I feel its quite common in a lot of freewheels. But just the side to side play seems a tad more than normal.
Another question which I had was I am aware a stretched chain will eat up the cassette/ freewheel eventually, does it have the same damaging effect to the crank as well ?