You need to do the mesh mod to save that flywheel and ignition coil from pebbles and all kinds of stuff.
It is the stock spring the problem, sand the surfaces in the clutch pads to make them rough and the same for the clutch bell, give it a cross hatch finish. Swap the red spring into the used pads, the shoes still have plenty of "meat" for them to engage.
IMO the clutch pads are reusable, resurface and you should be fine. Now that you are there check for any edges on the moving areas, shoes to bolt, shoe to mounting surface, and polish those, bolt area where the shoe moves on, polish. The parts will have some play but its normal. Mount the shoes, shims, bolts without the spring and parts should move freely, no resistance at all. If so then you may need a thinner washer, or smooth out on the side of the clutch mounting surfaces doing figure eights on sand paper to make them thinner. I have had to do so a few times.
*** the springs should be free in the shoe little hole, test w one shoe at a time. Have seen the hole too tight, use a bit of a smaller size and drill back and forth on the shoe side to make the hole bigger, NOT the hole side facing inwars into the center. We don't want to reduce the distance from hole to hole. Only if needed, outside area of hole.
Follow the line of the spring over the shoe and sides dremmel if need be if the spring is resting on the shoe sides. The red spring should only touch the shoes only the little holes and thats it, everything else should be dremmel and smooth out. don't dremmel on the spring itself, leave it slone.
The shoe mounting area is to chunky, sanding off by hand, taking my time until the gap is about right and clutch shoes no longer restricted from movement w them installed and held in place by its bolts. Once all set, install red spring and then again w a flat screwdriver attempt to open them (a little, not too much) and view if the red spring is catching to anything upon moving them. Its going to be very tough to open them up which is about right. The new spring will wake that engine up, by letting the engine engage at a higher rpm. Remember to sand and give a rough finish to the bells.
Not necessary, but if you can drill holes on the sides of the clutch carrier and towatd the back (careful w the engine block) now that everything and exercise caution w the shoe mount or remove to be safe the clutch carrier out of the engine.
Drill holes on the clutch bell carrier as well. Do as many and big as you can. Use your judgement on still maintaining the integrity of the parts. I did them on mine its soft aluminum. At least a few at the bottom so when using carb cleaner stuff gets out through the holes.
The 5ive is a heavy truck and the clutch system gets hot fast, proper ventilation is a must to keep them cool and prevent the glass buildup. If not want to do the hassle have it in the list to purchase a open clutch carrier. Nothing will happen, look at all those bajas w them and rarely pebbles get jammed in there. It is much tougher to drill holes to the clutch bell, the metal is very strong, I would rather buy the ventilated bell at a later time. Then you can easily spray carb cleaner into the clutch parts without having to tear apart for cleanup all the time.
// Carburetor cleaner, lots of ventilation, newspapers, rags, and if possible a mask as not to breath any of that dust.
The engine looks good. I would later swap the cheap plastic intake manifold for cnc upgrade part.