Drive chain issue (all help appreciated!)

I would be a bit worried about the area on the seat tube where the original toptube was welded on. You might have to clamp the rear mount of the engine over that area and it could be considerably weakened as well as uneven. The rear mount is the most important one. You can construct a rear mount plate that uses two separate clamps and avoids putting the stress directly on that area.
 
Alright thanks for the help everyone, and one last question. What should I do if the rear sprocket will not fit on the rear wheel because the center hub is too big?!?!
 
4 options there. 1: ream out the center hole on the sprocket. 2: get a new wheel that will fit that sprocket. 3: get a sprocket adapter meant to fit your hub. 4: Get a disc brake wheel and sprocket meant to attach at the disc mount.
Think that's cheapest to most expensive.
 
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