1 - I think the Direct connection dist had the smaller diameter, stock sized cap, so it should fit. The aftermarket distributors with the larger caps may hit the cylinder head. Also, on something like this, I just use a quality (Smith Brothers or Manton) 5/16" pushrod. with a 3/8" pushrod you would have to check to make sure the pushrods don't rub on the pushrod holes.
2 - Most likely ICON #836 piston set. 2.067" Compression height, 12 cc dish volume. In theory, a 10.725" block height the piston will sit 0.015" below deck, and with a 0.040" head gasket calculates to 9.33:1 compression ratio with 84cc heads.
Milling the block so the piston is at zero deck at TDC, the compression comes up to 9.61:1.
3 - I haven't looked at the different cams, but the high rate of lift cams from Hughes, Comp, and Lunati are pretty good. I would run the lifter bore broaching tool from Hughes through the lifter bores to make sure they are round, and then use a brake cylinder hone on the lifter bores to make sure they are all smooth so the lifter rotates easy. I also like the Billet 3-bolt adjustable key way timing sets from 440 source. The Lunati Voodoo cams use the 3-bolt timing sets, and for something mild like this, I think I would just run the 10230703LK cam ($207 for cam and lifters.) The cam is 226/234 @ 0.050" and 0.494"/0.513" lift on 110 LSA.