1. The factory tether doesn't work, I located the wiring harness from the dash and the two plugs are just hanging there. Where should they be wired too?
They should be plugged into the wiring harness of wires with same colors (if it's actually a factory switch) - I attached the wiring diagram
2. What type of oil should I use for the oil tank? I bought Lucas semi-synthetic low ash. Is semi-synthetic fine, or should I be using full synthetic? And not sure what low ash versus regular ash means.
Use INJECTOR two stroke oil (synthetic or non-synthetic makes no difference, but synthetic smokes less because it does not burn with the fuel - down side is the exhaust runs wet and sometimes drips splooge) - oils have several different bases and ash is one of them - on rare occasions mixing an ash oil with an ashless or low ash type can cause the ash to solidify and can clog a filter. I don't think there is a filter on the 90's oil system, but it is best to not mix the oils. Just use the Polaris blue two stroke oil, Honda GN2 or any other two stroke oil labeled for use with injector systems.
3. Oil tank - seems like a lot of people eliminate the oil tank and pump and use pre mix. Is this better for the engine? If so, does the carb need to be re-jetted? It already has an FMF pipe.
I like keeping the injector system in place. It is convenient and prevents using the wrong fuel - just put oil in oil tank, put fuel in fuel tank and ride.
4. Air filter- stock or uni-filter? And if stock, does it get oiled or run dry?
Stock or Uni either is fine - both are foam and should be oiled after cleaning - clean with soap and water then dry thoroughly (don't clean with anything more aggressive than diesel fuel or mineral spirits) (gasoline will destroy the foam after a few cleanings and is dangerous to use) - oil with Uni foam filter oil or automatic transmission fluid - after oiling, blot as much oil out of the filter as possible - press between paper towels (do not wring) until only a few spots of oil is seen on the towels after blotting.
5. How important is the rubber shield thing that goes on top of the engine around the intake manifold and spark plug? Ours doesn't have it.
That rubber shield is a splash guard - not really very important - it's more important the rubber boot in on the spark plug cap for proper cooling.