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• #2
Yes.
Remove the freewheel, and as 5-speed blocks are narrower than the 7 you have at the moment, you should be able to do it by just swapping out drive-side spacers. You'll also need to cut down the axle and dish the wheel 3mm less.
With less dish and less cantilevered drive side bearings you will have a stronger wheel.
Is it possible to change my rear hub from 126 to 120mm?
I know I can squeeze it in at 126mm, but I am trying to get the bike bike to original 5 speed block spec as it has some nice history with it