The little button on the lift lever works like this, you hold down the big button (vertical one on top) with your thumb, then pull in the little button with your index finger. This locks the big button down, so that the lift mechanism can float. You do this when mowing, then set the slide stop (down on the frame of the tractor) to set the desired mowing height. Most folks never even knew how this worked, but it is the way the tractor was designed. Cub Cadet mower decks were never designed to ride on the ground, and the skids/wheels were just intended as "anti scalping" devises. The height of cut is supposed to be set as I described, setting the stop down on the frame so the lever cannot go any further forward. With the lift button locked out, the mower deck can then float up over things if it needs to. Again, most folks just used the height adjust and picked a notch that they liked, and mowed there.
That yellow lever on the transmission tunnel would have had a tin like, piese of spring steel, about 2-inches wide welded to the lever, that would then stick out about and inch or so. When you lifted the lever, the spring steel would push down on the two release buttons on top of the hydro unit, so you could push the tractor around in your garage, or if you had to tow/pull the tractor, you could release the hydrostatic drive. It still wasn't recommended to tow the tractor any distance. It was really just intended so you could roll the tractor around by hand in your garage. Honestly, pretty much useless and a really crappy design. I'm not sure I'd even try to fix it, but an easy fix would be a piece of steel plate welded to the rod. Sheet metal was just too light, even though they used "spring steel", they pretty much all just broke off eventually.
Nice work so far. The frame is pretty simple, although, the tricky part is where the hydro linkage and mechanism bolts onto the steering tower. You would have to be REALLY careful and take a lot of measurements if you decide to build a new frame, to make certain you get the hydro levers and mechanism back in the exact position, otherwise, none of the hydro drive system willl work right. The tolerances are petty tight on that stuff, and there's not a ton of adjustment in the linkage. I've rebuilt a few of these tractors, and modified the frame in my last one to take a 14hp engine, and after looking at all the hydro stuff, I decided it was much easier to just modify the frame up front for the engine. Nearly any engine will bolt in that frame, I've even seen one with an Arctic Cat 440 snow mobile engine in it, which only took a little cutting/welding. But, it's all up to you.
Keep the picks coming