Installing reverse will be quite a chore. Likely better off getting a kart with reverse already on it.
As far as nuetral, there are two thing you need to check:
1.) Take the cover off of the torque converter. There is a front pulley and a rear one. On the front one, there should be a copper / bronze looking bushing that sits on the shaft that the belt rides on. This is likely gone and that could be why it is not disengaging.
2.) The other likely cause is that your entire drive pulley needs disassbled and cleaned. After riding for so long and not being cleaned, they tend to gunk up and this too will cause it to get stuck in gear. Check for that little copper bushing. If you look in the torque converter section you'll find a post by me that tells you all the parts that should be there with a picture.
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