importance wise i would say water and oil are a must. wide bands are nice to have. if you want to know everything you can go crazy with oil temperature, fuel pressure, trans temperature, volts, big tachometer, shift light
try this
http://351winsor.com/joel/Ignition_Systems/tfi2.html
ive never checked one,but if you have a known working distributor, just swap it in. if it fixes the problem then its probably the tfi.
these links may answer some questions and give you some ideas.
http://www.mustang50magazine.com/techarticles/m5lp_0701_1993_ford_mustang_bolt_on_buildup/viewall.html
http://www.stangnet.com/mustang-forums/threads/fox-talks-really-common-questions-thread.825480/...
what do you mean grinded on? if the shoes that came out were down to bare metal i would get new drums, they are cheap enough. also lubricate all moving parts well.
what trbkrb said. 1/2 inch breaker bar. be sure to get all the little things.... the c clips for the parking brake cable, save every bolt, lug nuts ect...
efi tuning can take some time to understand.
think of it like this. the computer uses the 02 sensors to get close to a certain afr that you tell the computer you want to run at. using the wide band and data logging allows you to see what your actual afr is and tune to get it where you want it...
thats your bell housing, where the engine and transmission come together. looks like what i call a seep not a leak. if you dont see lots of dripping on your garage floor i would not worry about it.