I am 99% sure the woodruff key comes out. Your stripped threads could be a problem. I recently saw a crankshaft on CL for $25, I think in S Carolina, but you know have to split the case to change it out. I am working on my People AC engine, but should be similar to S9 LC? After I made my post, I thought about maybe the pickup coil being adjustable. If it's easy to get to, you can just try some different settings to find the sweet spot for timing. When you change the position of the flywheel, it gets to be a lot of work mounting and remounting trying different settings. Do you have a timing light, degree wheel, piston stop?
I haven't done a search, but I bet there is some good info about timing for the S9 engine. The maintenance manual says to check timing and there are marks on the flywheel and case to check with a timing light, so it must be adjustable somewhere? I would stay close to stock timing, unless you were want to make HP at high revs, have large carb, higher ports. Cheers