Welcome here!
With ignition drilled out you mean, ignition lock gone? If yes, does not matter as long you are able to move kind of switch to make it run.
Fuel in oil, smell is individuelly different, at that motors normal.
Airfilter oily, maybe too much gearoil?
Would check belt and rollers and if suspect change.
For this clutch:
There are different opinions how to "clean" this little clutches.
One say, left hand brake and throttle up.for few seconds. This approach bears the danger of heating up the clutchbell and mold it oval, which means a new bell.
Other take the bell off, if not blue and oval yet, sand it inside nicely, sand clutchpads a little and put it together. Have your pick.
New sparkplug, check brakepads , change brakefluid, tap valves, check/ change tyres.
Empty pukehose.
Basically this aircooled are pretty reliable, if not abused or neclected.