The bushing needs to have about 1.5-2 cm cut from it. Easy enough to check since you can keep on testing the flywheel until it fits. I just used a die-grinder cut-off wheel and cut it flush.
I think I'd get a new shortblock, or a low-mileage engine from a salvage yard. Personally the engine is the best way to go because you can get all kind of goodies and spare parts from it. Coil packs, DPFE sensor, vacuum switches, 24# injectors, plus all the 3L intake components that you can use to experiment with.
The rest of your questions were handled in other posts here, some within the last couple of weeks so you should be able to find them in a search.
Have fun, hope the tips help.
warmonger
Former owner of '99 CSVT - Silver #222/2760
356/334 wHP/TQ at 10psi on pump gas!
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'05 Volvo S40 Turbo 5 AWD with 6spd, Passion Red
'06 Mazda5 Touring, 5spd,MTX, Black