Need help with muffler.

Assuming that it is the same size muffler the flange might be welded on a few degrees off which is why you're striking it with your pedals. Is it possible to tuck the muffler in more closely to the frame? If not you might need to get someone who has welding gear to reset the flange angle for you.
To stop the securing screws from coming undone drill the heads through with a 1/16th drill and tie them together with a short length of safety wire.

get a round file, file the hole on the motor chain side at the top to make it about 1/8 inch higher, file the hole on the pedal chain side to make it about 1/8 inch lower, tuck the muffler closer to the frame, then tighten

make sure you use the hanger that comes with the kit to hold up the weight of the bottom of the muffler

I bend the tubing so the muffler is farther from pedals in the past when I ran a stock muffler, usually only has to be bent a slight amount, very simple and works everytime in my experience.

just chuck the pipe up in a well mounted bench vise and pull until it moves about a 1/4-1/2" in the right direction and you have problem solved.

this sounds very crude and it is but I have also put tubing if fork of tree and pulled on muffler end to slightly bend pipe for clearance.

as for the bolts coming out, use lock washers under them and put a healthy does of Blue loctite or similar thread locker on before screwing them in.

personally I like using studs on the exhaust and then double nutting them with loctite on threads and they never come loose.