ill try to answer a few.
1. you need to slow down the water flow on the exhaust side. What's pictured is correct. A lot of people have the holes on their jug welded or epoxied to match.
2. do a squish test. 2 main things. Get it set close to .055" and have the dome reshaped by a builder that knows his zillas. Squish tolerances will be a bit different depending on which builder you talk too. but, .055 is good middle ground. Adjust the squish clearance via base gasket. You can order different thicknesses from cometic.
3. There are numbers on the side of the carb. 43b00 is 87 43b10 is 88-89 and 43b20 is 90. What you were told about the carb years appears to be correct. Go with the 43b10+. Im not sure about removing the BB but most people just use the newer carbs if it's an option.
4. I would definitely replace the slide. I was having serious pilot issues and couldnt figure out why my bike needed a 45 pilot and even then it was not consistant. Replaced my slide and installed a 35 pilot and now it starts within 3 kicks.
5. I reckon. Best way to tell is run it. I don't have a manual in front me but i'm sure there are some numbers someone can tell you.