I respect your "date to be different" approach to using an h70 in your scorpion.
Please consider the following:
The overall width of the engine is basically determined by the length of the crankshaft. You may be able to save a half inch or so by shaving down the fins and chopping the shroud a corresponding amount but there is still the starter cup and nose of the recoil to consider. The starter cup needs to be chopped too.
A shallower side cover will not change the
length of the crank .
Hs40 and hs50 flywheels will not work on any h50 -h70. The taper is not only a different angle it's also a different width.
A certain amount of air needs to circulate as you know these engines are air cooled, reducing the air flow too much could raise the operating temp,lead to overheating and reduce engine performance.
Maybe the fins on the h70 are larger that the hs50 because the engine is bigger and needs the additional air flow.
Regarding the electric starter is it worth the extra weight for only intermittent use?
Check to be sure that your star rod(for an h50?) will actually fit your h70. It sounds like a key component in your choice of build. In my experience with h70 power snowblowers, they are notorious for breaking rods.
You mentioned that you set engine in the frame Consider the balance and ridability of the
bike with such a wide engine ie., reaching the footpegs securely and safely . Its one thing to sit in the garage and put your foot on a peg and another to go riding off road and you have to get your foot on the peg.
H50-H70s are substantially larger and heavier than hs50. Any performance gained from the extra displacement of the big block engine is somewhat offset by the extra weight and bulk. Exception being Star racing engines. They can power a small
car.
In closing have you thought about an hs50?its smaller ,lighter, dyno cams and billet rods are available .There is also a lot of grass roots development surrounding high performance mods to these engines. You can even find some with electric starters, if your set on that.... Just a thought...
Best of luck with your build whatever you decide.
P.S.
Please refer to original tecumseh reference materials for engineering specifications and interchangeablilty of parts. These will answer most if not all of your questions.. Especially good are the old hardbound manuals with the interchangeable pages They are a little cumbersome to work with but they contain information you just cant find online.