Philosophically speaking, if the bike you have is indeed stolen, why would you continue to deprive the rightful owner of his property? Just wondering.
Anyway...
If you did not get a bill of sale with the bike or at least verify the vin numbers paper to machine before taking possession, technically, you blew it! Because, if the bike is hot and in your possession and you are caught, you will be the thief in the eyes of the law, unless you can point specifically to the person who sold it to you. A bill of sale goes a long way to shifting responsibility. Although, you may be in possession of stolen property, you can rightfully proclaim you did not steal it. You lose the property, but avoid prosecution.
Stamped steel has a higher density/hardness where the numbers were stamped. There are polishing techniques that bring this difference into visible acuity. Soft metal is easier to polish than hard metal. This difference is one method of serial number recovery. There are others.
So, either the bike is stolen or there is some other reasonable legit reason that the bike's numbers are not there.
If it is stolen, you have to decide whether you wish to be part and parcel to the theft. You can continue to hide and obscure the bike or it's parts in order to profit or negate your loss in the ill-advised transaction.
If your primary goal is to minimize any monetary loss. You could strip the frame bare of parts, then truck it and perhaps the motor down to DMV to let them decide what should be done. This would go much smoother if you have a signed bill of sale. The worst they would do is confiscate the frame. (you said that the clean title you have has the proper engine numbers, so ownership of that should not be in dispute.) They may be able to recover the real identity of the bike, and if not stolen issue a number to complete the registration. They may decide it isn't valuable enough to bother and simply have another means to work around legally titling the bike.
I expect the recent scrubbing by you of the VIN area will make it difficult to remain credible of your non-complicity.
If you lose the frame, then you still have the parts to sell or assemble onto another frame, if your conscience allows you to proceed that way. However, if Karma has any credence, someday in the future someone will be riding around on a bike made up of parts that used to be your motorcycle.
If it is not stolen, DMV will advise what the proper procedure to reinstate the bike is, with the result that you will own the bike legally or properly.
Good luck