Follow these steps to get the most out of it:
Stage 1: Get a $6 tachometer off ebay. DONT! get the similar looking one off amazon. get the china one from ebay.
Remove governor and plug all holes with short bolts and flat washers and red loctite, or thread the holes and put a screw in.
File your timing key .036" about halfway deep to advance timing 6*.
rod blows at 6200rpm, flywheel blows later, so just keep the rod safe
Install a 1-3/4" pulley, mount the 15" sheave on a 24" wheel (no jackshaft? do this like i say!) and run a belt tensioner setup for your clutch.
buy the tecumseh h35 carb with adjustable jet, and h35 intake manifold, and air filter assembly. figure out the carb linkage, it aint hard. put a cable stop bracket on one of the headbolts and run a spring between there and the arm on the carb, if not using stock carburetor.
make sure your breather is working properly and the gasket is installed correctly allowing oil to drain back into the block
make or buy a custom exhaust header that bolts to the motor, not screws into exhaust port, and make the pipe at least 14" long same diameter.
Stage 2: Do the above, then: Buy a new head gasket:
lap valves in, set lash to .005/.007
Shave head .025" to .030" but no more, BUT if your new head gasket is copper or aluminum thin .010" don't do the shave. Stock gasket .047 shave head .030".
use grinding bits and burrs to smooth out exhaust port. Round the inner corners on both ports and smooth all big bumps and burrs. Smooth out those exhaust threads.
Use plug indexing washers to point the spark plug open end at the exhaust port.
These things should take you to 4-4.5hp, 46mph@5500rpm which is about the highest speed you'll reach with 4hp.
If you insist on using the clutch, the pulley on that clutch is actually 3.2" not 3.5, and you'll need to run a 16" rear wheel to even get close to a usable ratio, in fact it will still be too tall to climb hills, so the auto clutch isn't going to work for you in this case.