Since you've bought those "pegs" you're driving yourself in a certain direction if you want to use their mounting base, and in my opinion creating a tad tricker design and fab effort.
Not using the mounting base, it just came with the peg.
Your sketch can be simplified. Eliminate the whole threaded rod assembly by a using a standard SS bolt coming thru the back of the plate and into the peg. Between the peg and the plate from the outside, you need the bronze bushing to act as a collar inside the peg, and perhaps a small spacer to move the peg outboard. Also, spinning on that same shaft, you'd create the "ear" that the toe peg (shift side) links to.
Yeah, I was thinking that first but then I'd have to tap the peg. Not a big deal but I hope I have a tap that large. I just kind of wanted to use the same "stepped rod" method of attaching the peg.
Unless you plan to create a 2 piece rearset that uses stock type shifter arms and brake arms?
Nope, same piece, just like the picture posted of Kott's.
Perhaps you could sketch something up completely and that would help. Also, SS or aluminum are both strong enough. You just need a thicker piece if aluminum. Tube OD is 1" so you've got plenty of surface area to attach to. If you're planning on screwing hate plate to the mouthing tabs on backside of tubes, I'd use 1/2" aluminum billet blocks, milled or cut down. Flat sheet is fine too, but I'd want perhaps 5/8" in aluminum. For SS, 3/16" minimum.
Kott uses 3/8" aluminum and that's what I have too. Seems plenty thick enough.
Here's a drawing. Hope it's clear enough. I didn't draw the collar with shift linkage tabs. I think that's obvious that it'll go around the purple bronze bearings. And as long as the bronze bearings are touching each other in the center then I'm good. Otherwise, as I tighten the stainless bolt then it'll draw the peg and bearings into the collar locking the assembly up.

I do prefer the single bolt method as to my machined part method just because it's simpler and I can do it at home.
A benefit of using slightly thicker material helps position the rearset "outboard" of the tubes for your ankle to clear the bike. It also helps align the shift side, even still you may need an offset shift arm. Then you need to work out actuating the brakes and clearing for the kickstarter.
Where I welded the tabs the plate will be slightly outboard of the frame. So it seems like it'll work just fine. I'm planning on using an offset shift arm too. Will cross that road later down the line. Clearing the kickstart doesn't seem hard. Worst case I can put a slight bend in the kicker to make it clear. I've seen that done and seems to work fine as long as it's a slight bend. Don't want to put too much lateral force on the kick shaft if I kick it over.
This is how I plan on addressing the brake actuation. One of Kott's bikes.

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1978 Honda CB550K