Suspension bikes can be done with a shift kit, but drive chain strength becomes the problem unless the drive gears on the bicycle are inside a heavy duty multi-speed rear hub.
1) A heat shield is do-able if it in no way blocks the air flow created by riding from direct contact with the cylinder. Prolonged sitting still with the engine idling may cause overheating faster than normal though.
2) Wrapping the exhaust with header tape is somewhat common, although I recommend spraying it with a sealing clear coat made specifically for header tape in order to help protect it and the rider from abrasion. If any of the fibers from the header tape got stuck in a rider's leg or ankle somehow you may have a problem.
3) The pros and cons between a 2-stroke and a 4-stroke can start a small argument between some folks here.
The basics are:
4-stroke: Pros: No need to mix oil with the fuel.
Generally quieter in operation.
Longer life span.
More torque at lower engine speeds.
Better fuel economy.
4-stroke Cons: Heavier engine.
Need routine oil changes and occasional valve adjustments.
2-stroke Pros: Lighter engine, generally higher top vehicle speed (depends on gearing).
Easier to work on.
2-stroke Cons:Must carry pre-mix oil and measuring device with you to re-fuel at a gas station while out on a trip, or carry spare pre-mixed fuel with you.
Pistons and cylinders wear out faster.
Engine vibration is more noticeable as felt throughout the bicycle.
4) Best motor source:
Motors are usually found at many electric bicycle vendor sites.
Engines burn fuel and can be found at many bicycle engine vendor sites.
Read the vendor reviews section and decide which one sounds best to you.
http://www.motoredbikes.com/forumdisplay.php?f=109
I have had very good service through That's Dax and Pirate cycles, but then again they are the only vendors I have had experiences with so far.
http://www.thatsdax.com/
http://www.piratecycles1.com/