I'll try to go through your questions in order David. First, removing the drive shaft sprocket. I think all you need to do there is hold the shaft from rotating while you unscrew the nut retaining the sprocket. The shaft rotates anticlockwise when viewed from the sprocket end, so the nut should have a right hand thread (cylinder mowers have a sprinkling of left hand threads in the drive system, so always be careful about this). Hold the shaft close to the bearing housing with a Stillson wrench or a pipe wrench of some other type. Remember such wrenches are "handed" - they will only work in one direction, so the teeth bite into the shaft when you unscrew the nut. That means you have to turn the wrench over if the teeth lie on the shaft in the non-biting direction, otherwise you might as well use a file while pressing on the back stroke instead of the cutting stroke. Then apply a socket or ring spanner to the nut, and unscrew it. Your washer under the nut appears to have been bent up to help lock the nut, so you will probably need to tap this down flat to be able to put the spanner on properly and unscrew it easily. After removing the nut the sprocket appears from the parts list to be pushed onto the shaft over a key. Look at the end of the sprocket to see if there is a keyway, to verify this. If there is a keyway, the sprocket may be a bit tight on the shaft. If so you may need a little gear puller to pull it off.
How much metal is removed from the reel during sharpening depends on two factors: how much has to be removed to "clean-up" the surfaces of the blades; and how the tradesman goes about the job. In my view, removing the smallest possible amount of metal while achieving a full clean-up is a sign of a decent tradesman. With regard to the bedknife, having a perfectly straight front edge along its full length, with a perfectly sharp top corner, is one of the requirements for good mowing. The other bedknife requirement is a perfectly smooth top surface, where the reel blades whistle past it. If the mower has ever been run with the blades touching the bedknife even lightly, there is a good chance the top surface of the bedknife will be a bit wavy, which is a bad thing.
We normally judge the state of wear of a sprocket by looking at it from a position in line with its axle, so we can see the shape of each of its teeth. The shape changes with wear. So far as the clutch is concerned, I personally would not be concerned about that small surface tear in the cork.
