[Sixpack577]

Lapping compound is a fine grit paste for polishing metal/cleaning up rough surfaces.
That crankshaft is galled.
I bet at some point that key broke, as that is the result of the flywheel spinning and wobbling on the shaft, while grinding fine pieces of broken key against it.

 

[Sixpack577]

key in their looks fine. Would I just install like normal than??

I meant that the key had already been replaced at some point prior to you getting it, because one broke before and caused that damage.
I would use a file to knock down the ridges and any burrs, and emory cloth to clean it up some.

 

[Sixpack577]

Gotcha. Will do I have files in the arsenal of tools. Kinda weird how the flywheel doesn’t have anything to tighten it down just gets pressed in place. Man was it a bitch to take out.

It's not weird...it's a 'taper lock'.
The nut just draws it into place, and remains as a safety. It is an interference fit, as once in position on the shaft, the i.d of the flywheel and o.d of the shaft are very close in actual size.
This is why you need a puller tool, and why there is a sudden pop when it releases.
It is a very good design.
Be very careful with a flat file on a round surface, and that is a hardened shaft that material will not easily be removed from.
Take your time so you don't put flat spots in it.

 

[Sixpack577]

I have a couple sets of files around. My dad did machining work when I was younger so tools are a plenty in this house.

Cool, then he knows what to do.