You are close on your set-up. The carb is wrong. I would agree on it needing a 750 dp. and no way would i run a 2x4 set up.
The spool is fine. But i hope you know never, and i mean never drive it in the rain. If your out with the car and the roads are wet park it until they dry.. I have a few customer running spools on the street with no problems.....And it goes with out saying they are limited drive cars......
I don't think it will run low 11's on motor with the combo you have now. There is a lot more to getting a car in that et range then just motor. If you have a prover car that was raced and the suspension is all worked out then you can start looking at good et's.
As a side bar here i sold a engine that went 11.95's all day in my car. The guy put it in a car that was 250/300 lbs lighter then my car. The first time at the track it went 15.50.... He had something wrong with the ignition or carb set up... Just telling you so you don't think you just hop into a unproven car and get good et's..It will take some work.
Need some more info on your parts before i can give you a good answer on the nitrous question..
killerformula is 100 % on that there is no street racing here. Take it to the track. That is what they are there for. It not worth the chance of hurting or killing an innocent person for bragging rights!!!!