So, I managed to get the bike up on a couple of car jacks, and same as with my carb leak issue, some good news and a crapshoot of bad. Good part is that when jacked up, the rear wheel seems to be moving with little effort eventhough its grinding on the metal. Bad part is that eventhough I know next to nothing of these bikes, I can tell that the chain is not perfectly aligned. The rear wheel sprocket seems to be sticking out a little, while the engine side sprocket is further inwards. The chain has almost no slack so I'm guessing its too short like someone pointed out.
Also, I noticed that the wheel has significantly larger clearance with the swing arm on the left side, but is dangerously close to the swing arm on the right side. I took some pix but not sure how much help they will be because those are some really #$%*ty angles to snap from. I'm a bit relieved that its not the tire size, and I don't have to go hunting for once especially since the one on there seems almost new. I'm gonna go back out there now to see whats the story with the front brake.