Re: Old dog learns new trick...Welding!
silverbear, if that was my chainstay, i'd fill in that spot with as many welds as it took, then grind it smooth, then find a piece of pipe that fits over it, and weld a "sleeve" over it.
then, i would solve the chain rub problem someway.
either weld a chain tensioner/guide on, or re-position the motor. (you can weld now. you can make your own mounts and stuff!)