Good advice from both on the seals, extraction of the old ones went smoothly. Installation presented slightly more resistant. Magneto side seal was eventually seated properly with some encouragement from a wooden peg and light hammer tapping, but the RH seal deformed in the process. Maybe not such 'light' tapping after all. Luckily the seal was only $5, another one is on the way. Next time I'll wait until shop time is over before imbibing.

As for the crank taper, I took Tinkicker's advice and applied grinding compound before lapping the flywheel and crank taper for a bit. The result does not feel like two well mated surfaces, and there is a large visible gouge running the circumference of the taper right through the keyway. Possibly an indication of a past shearing?

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Taking another look at the old key itself - while the piece is intact, I get the feeling I should avoid putting this one back into the machine.

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Hoping that with a new key and the securing nut torqued down it will be serviceable again. During my investigations concerning the flywheel I've repeatedly come into contact with the phrases "ignition timing" and "dial gauge". Until this point in my life I've understood these things roughly as well as I understand Greco-Roman tax law, but I'm sensing that it would be a good idea to learn what they mean and how to adjust the related components now, especially given the state of the rest of the magneto-flywheel assembly. 

Gouge is normal. Key is well and truly jiggered. Throw it away.

A teeny bit more lapping should do it. If you apply a few pounds of hand force pushing the flywheel into the taper after cleaning off the paste , and it grips the taper enough to turn the engine one complete turn without slipping, with plug in, it is fine.

If you dont have the jug and head on, leave it for now. It will probably be OK as is.

As Tinkicker mentioned, absolutely make sure you remove all traces of lapping compound from crank stub and inside flywheel taper... taper needs to be clean and dry to "lock" properly. Key is more of an "assembly aid" and provides minimal resistance to flywheel slippage... the taper does most of the work.

Don't follow me. But years ago i'd probably use a key like that to experiment advancing or retarding the timing slightly. As i said--don't follow my lead lol. I get lost.

& yeah ya lucky you found that before running & ending up having to get trailered home.

With a bit more lapping the tapers are fitting pretty well, I'm able to turn the whole crank over as described with just the flywheel. New key on order. Got new RH seal installed and I'm noticing there's noticeably more resistance from the new crank seals, I can even hear the rubber squeaking slightly on the crank. Will this self resolve and become lubricated with the injected oil from the crank case once the engine is running again?

I also seem to have lost a clutch plate during the tear down, or perhaps it was missing from the start. According to the parts diagram there should be 1xCLUTCH PLATE, 1 (perfectly circular, no protrusions) and 7xCLUTCH PLATE, 2 (slight bump on edge of radius). With the clutch reassembled I'm able to grip the exterior of the pressure plate and rotate it independently of the clutch basket by hand, but I believe in this state the clutch should be as one, right? Since the rod is not being actuated to separate the rings and plates.

One other question, was there a different model built and distributed in NA vs UK / elsewhere? I ordered a gasket set from the UK advertised as matching the 74-76 DT250 models but they are clearly not the right ones.

good job on the taper!

My guess is you might have purchased inexpensive aftermarket seals? I can't ever remember original seal "squeaking" as they have a slippery coating on the lips and grease in the recess.

250a in old parts book I have says should have one thick metal disk with no teeth that goes on hub first. Then a thick toothed steel. (First friction goes on next) Then 7 more toothed steels alternating with 6 more frictions. (7 frictions total). Stack ends with toothed steel.

That era 250 should have the same gaskets worldwide as far as I know.

What an odd clutch setup. 
It took me awhile to figure out what was going on in the parts diagram.  I thought the diagram was wrong at first.

As MarkT says.  If you are missing plate 1 (number 3 in the part diagram I looked at) the clutch cannot work as there will be nothing to sandwich the other plates.

That plate is the inner pressure plate and on most clutches is part of the casting of the clutch boss itself, not a separate entity.

Edit. A pic is worth 1000 words.  Take a look at a pic of my clutch boss.  That plate 1 ( number3 in part drawing)is doing the same job as the cast flange at the rear of my boss.  If it is missing, the clutch cannot work.

If ya looking at the drawing i'm thinking of, the 250's run one less drive plate & space it between the steels with a "blank" no inner splined or outer ears.
Works good & leaves room for adding one fiber.
Cant think why they did it except maybe the "Computer said No", only need X amount as doesn't make as much power as the 360.
Ok i'll look at the diagram later tonight incase i'm off the case totaly.

Bugger, ignore above, i'm thinking DT1 probably.
DT250A has the thick splined steel in first which is double thick--or thick & a half--to take the place of how most have a cast in backing.
Hence the different number for #3.
www.partzilla.com/catalog/yamaha/motorcycle/1974/dt250a/clutch
Actually re-thinking, if you have that style pressure plate then the last steel in that the pressure plate pushes on 'i thought' was slightly thicker too to avoid any possibility of flexing. I dunno--pic doesn't show a different one, only #5.
Just to explain my thoughts, here's the DT1 parts #5. Ok irrelevant--but!!.
www.partzilla.com/catalog/yamaha/motorcycle/1970/dt1c/clutch
 

Aha! I did not realize that one of the plates might be integrated with either the basket or the pressure plate. Took the pack off and checked the bottom of the basket, no flange or plate there. On the inside of the pressure plate though I found a set of teeth, and furthermore they were not engaged with the grooves of the basket, leading to all the free play in the pack. Was the exact scenario described by the instructor in this video  @18:10.

On the clutch parts diagram  it indicates that only the 360A uses such a style of pressure plate with an integrated clutch plate, but here I am with one on my 250. Maybe the previous owner swapped the plate at one point? Things are feeling much better now with the outer plate properly aligned.

Back to waiting for parts to arrive, thanks to all for the helpful input as usual. By the way, is there some trick to getting image attachments to upload? Was working for me a few weeks ago but now I get errors about a failure to move the file.