I swapped my Cougar XR7 to a 5 5sp and yes you can wire up the neutral safety switch. My car shifter was in the floor so it was simple. Get a switch from a manual Stang and tap out each connection and wire it accordingly.
I'm using an 87 Stang K-member on my 87 with my stock control arms and they are fine. I 17x9 wheels with 245 tires the car is down 1 inch and have no tire rub except if i hit a dip on a turn at speed.
I have to believe your car is running rich. I have flowmaster on my 87 the car is modified been driving it for three years and had no problems. you may need to install heat shields mine has heat shields.
A buddy of mine has these same type of rims on his 88 and never mention any rubbing not sure of tire size. My 87 I have 17x9 4 lugs with selby rims on 245/55 with no rubbing except when I hit a dip because my car is dropped about an inch.
I have an 87 XR7 and was having the same problem. After 9years I found it to be the marker light. The light screws into the 1/4 panel theres a gasket between the light and 1/4 panel.