there are several quick fixes to that..BUT..
1 and 1/4 inches is TOO SHORT!! That is ALWAYS going to be your problem.. The way the center-fugal clutches work, the clutch would break in half trying to run it on that short shaft..
You don't have to use the set screws.. You can actually just run a bolt down into the end of the crankshaft with a washer on it to hold the clutch down, which is actually the better way to go..
Problem is, the 1 1/4 inch crank, won't be driving the drive hub of the clutch.. Even if you were running the clutch outboard, the tension of the chain pulling, and violence of the engine being an engine, will still break the clutch in 1/2..
You could remedy that by putting a bushing to make up the difference, with a bolt in the end, all aimed to be perfect when assembled.. But that doesn't help you inboard..
The original clutch actually was a little bit thinner than a max Torque, or Hillard is, but just a fraction.. Not but 1/4 inch or something.. Very little.. They all work the same way and are about the same machine..
You just need a different crank....