Using the 85 hub and running the sprocket outboard works to fix chain alignment, as does useing a the center from a an old sprocket between the hub and sprocket. I use the inside race from a bearing between the bearing and hub on mine many differnt ways to do it.

As far as holding up in mx, better bring a welder with you. The newest of these frames are 20 years old now, as a 250 there not terrible, but expect to chase cracks. The best thing you can do to alleviate this BEFORE YOU mess with an engine swap, is invest in QUALITY shocks and suspension components OEM doesnt cut it. You will be faster with good suspension than you can ever be with a Crap suspension and a big fast engine.

Anyone I have ever talked to has said the same thing about Hybrids and MX, fun in practice but too much to hold onto to race, unless you run big wide open gp style stuff.