The shift drum has a dowel pin that engages the slot in the back of the shift lever. It'll never really work right without it. The selector lever bears against it when moving back and forth from high/low range.
Find it or a suitable replacement.
The one Fixer linked is what you need.
As far as sub-tranny lube, there are two oil passageways in the engine case cover. They have O-ring seals. You should have noticed (and replaced) them when removing it to install the sprocket.
The shaft you're seeing is the mechanical neutral indicator.
The electrical neutral switch is in the engine case, has a single lead wire and makes ground contact via a brass disk located on the shift drum inside the transmission.
Last edited by Gabriel; 05-30-2019 at 08:54 PM.
I was born and raised on Venus & I may be here a while.....