(The starter gear doesn't have any broken teeth)
So, I finally had a chance to take off the starter and look at it. The gear just doesn't go any further than I saw it going before, meaning it only meshes with about half of the flywheel teeth's width when fully extended. It doesn't seem to be stuck at all, that's just the full length it extends. So, honestly, I think it's just poor design or poor manufacturing tolerances and it only meshes with half of the flywheel teeth. So when it wore down due to my overworking it and starting with weak battery, etc. and the edge of the flywheel teeth wore off it gave me problems.
To fix it, rather than buy a new flywheel, I installed two washers (spacers) each on each of the starter bolts (probably should have switched to longer bolts, also but I didn't have any) reinstalled the flywheel and double check that it's not coming into contact with the shoulder of the starter casing- it's not which proves that there were very poor tolerances. Anyway, started right up, first try.
Now with the starter working and the new gastech regulator (
) my generator is starting and running smooth directly to gas for the first time since I bought it 
alhumdulillah
