Rear travel, as reported in the shop manual, is about 3.5"
As for the swingarm, I pretty sure it's all steel. Welding may be the better route to go as opposed to drilling/tapping. Drilling could take from the integrity of the unit. (although Edalbris did drill a grease fitting into his at the driveshaft area)
Just don't get it to hot when welding. Many light tacks are better than a continous bead so you don't heat it up too much.
And I believe more than a couple here have already chopped the back of the frame off without any problems.
AKA: Tim & 'The Adventure Cycle' VROC #24567, NEVROC, SteelCity VROC
"When life throws you curves,
Aim for the apex."