Didn't quite answer all your questions. A cable clutch conversion would require some cutting grafting and the the 66 style hydraulic pedal is quite different from the cable clutch pedal (think of the mechanical differences between pushing a rod vs. pulling a cable). You could grab the pedals from the donor, but I've read (In "rolling") that the pedal lengths and angles are a bit different, so your clutch pedal would not line up with your brake pedal and accelerator once you got it all back together.

Anecdotally, the larger flanges and the larger diameter (2") driveshafts allow you to use larger U-joints which don't break under the high torque of the B20 engines.
I think JohnMC had that issue in his PV or one of his other old volvos (not the 1800E).

If you want to swap the output flanges, be sure you lock the flange itself and do not apply your nut-breaking torque to your gears. I hear that an M40 can take it, but I personally felt much safer putting two flange bolts in and locking the bolts (and flange) against the floor with a breaker bar, *then* using the 1 1/4" socket to break the retaining nut loose. The flange slides right off after you remove the big nut. That big-arse socket is also handy when you try to press the u-joint caps out...