I see that you are working away at the various problems you have encountered. Bravo! You have to be a little stubborn to reap the rewards sometimes. A certain amount of diligence not only helps get the job done but it sometimes saves your skin too.
I know you are eager to get riding but taking the time to do the job right may save you from a bad or dangerous experience later.
You are doing a good job of solving the problems this installation has presented you. Being a 2 stroke it will indeed run in the orientation you have selected as long as the carburetor is relatively level which you have solved.
The next hurdle that you will have to overcome will be mounting the engine well enough that it will withstand the vibration a single cylinder engine is known to create.
It is possible that hadn't finished tackling this problem when you took the pictures so please correct me if I am wrong. However if you were going to go with the rear mount as you have it in the pictures I'm afraid you will find yourself disappointed or possibly even hurt when it fails. It needs more support than that.
If I were presented with this particular challenge I would seriously consider finding a different bike for my motor. Bikes are so inexpensive especially if you have a local bike Co-op that it is often cheaper and more satisfying to find the right parts for the job. If you are really on a tight budget you can often reuse many parts on your current bike. You really only need a slightly bigger frame. With the right one the motor fits like a glove.
Congrats on your hard work so far. You can do it!