user exists when trying to add user to systemd-journal group

You don't use useradd to add a user to a group. You use useradd to create a user, hence the error message. Try:

# usermod -a -G systemd-journal shirish

or

# gpasswd -a shirish systemd-journal

In either case, you need to log in again to make it take effect. A quick-and-dirty way of doing this in a running shell is:

$ exec su - shirish