i was able to get the flywheel off by following the advice of a fellow motorcycle punk. He told me to just use the rear axle and tada it popped right off. SO now I can finally determine for sure what caused this poor little bike's demise. It looks like a massive bearing failure. Half of the bearing is actually missing and the primary drive must have gone out of alignment causing a huge amount of friction on the other end. The strain from the motor actually sheared the other end of the primary drive right off.
So it probably didnt have enough oil at the time this happened or the bearing was defective. Usually the don't just split like that.
The kickstart mechanism doesnt seem to have suffered much
The cam chain tensioner is in good order
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Heres a shot of the upper crankcase with the new part in place after having replaced the worn strip of metal that holds the bearing in place
The lower crankcase was filled with sludge and aluminum shavings... never something you want to find in your oil while you're doing an oil change.
Once I get the gasket set I ordered it's reassembly time. For now I'm concentrating my efforts on cosmetic things. The fender which was bent, a common problem with these 60s fenders the internet tells me, is now straight and the clutch and brake levers along with the handlebar perch have been repainted. Pictures of that to follow.