My first question is the output shaft moves about a 1/4 inch when I pull on it is this normal?
Yes that's normal, with the clutch basket removed. I'm pretty sure when the clutch basket is replaced and the clutch nut tightened, that will eliminate the end float.
With the seals it's worth asking yourself how difficult will it be to replace when it's all back together. The O-ring was probably strained on removal, I think that would be worth replacing. One thing you will probably see soon is how incredibly easy a lot of brick parts are to replace.
Some seals will be dry after a long storage. I had coolant leaks under the pump after storage but it sealed up after riding for a while.