Cub Cadet 123: head differences, damaged bore, hydrostatic leak

[knucklescraper]

Hello. I am a new forum member. If I have posted in the wrong place or
should have posted separate questions, please let me know.

I acquired a cub cadet model 123 with a Kohler K301AS engine s/n C020835 spec no. 4759B about a year ago and have been fixing it up (see attached photos 01 and 02).

I recently swapped engines due to the connecting rod breaking in the original
and taking a chunk out of the cylinder wall. The replacement engine K301A
s/n E0009326 spec no. 47138B has a block with studs for the head. My original K301AS had no studs. I have attached photos of the two heads (see photos 03 and 04). I decided to use the head that came with the replacement K301A engine, that is, the one meant to be used with the studs. After I installed the head (see attached photos 05 and 06), I realized that the thin sheet metal
plate and thicker plate (see attached photos 07, 08, 09, 10) no longer fit. I started to modify them to accomodate the new spark plug location but then realized that there is insufficient space vertically on the studs if I use the spacer bushings that came with the engine. I could use shorter bushings but maybe this affects rigidty/stiffness of the installed head?

(1.) Is it safe to run the engine without using these plates?
I'm not sure if their main purpose is heat transfer or protecting the head
from damage or what. I also don't know in general why Kohler changed from
using no studs to using studs and bushings.

(2.) Is there an advantage to using one head versus the other due to spark
plug location or because of the studs or some other reason? The head from the studded block has the spark plug aligned over the exhaust valve. The head from the block without studs has the spark plug located in between the two valves.

So the options I can think of are to use the head meant for the studs without
installing the plates (that's the way I have the tractor now), use this head with modified plates and shorter bushings, or use the head from the original engine and install the plates.

Additional questions not related to the head.

(3.) If the chunk missing from the cylinder bore from my first engine
(see attached photo 11) is below the max travel of the piston, can that
block be re-used, maybe after dremeling the edges?

(4.) I have a hydraulic fluid leak coming from the hydrostatic transmission.
It is a slow leak coming from some point near the top of the unit (see
attached photos 12 and 13) but I can't determine exactly where. The tractor
had been running for months without leaking. I first noticed it over the winter when I wasn't using the tractor and before the connecting rod broke. Has anyone used Lucas stop leak with success? The container says it is 100% petroleum and it looks like really thick oil. I'm not sure what else to try short of splitting the tractor. But even if I do that and find the spot it is leaking from, I'm not sure I want to tear into the hydrostatic transmission. I think it is beyond
my skill level.

Any comments are welcome. Apologies for the long post. I assure you it took
me far longer to write it than for you to read it.