I think pulling the clutch still on the motor is common practice, since messing with the clutch alignment can be a bear. Did you put in those bits of wire to space the clutch when you took it off?
Little box in the exhaust is just a resonator. I would put in a new exhaust, X and dual cats up front and a muffler of what ever flavor you like in the back. This is a nice one, and Roger sells them at a good price.
