1971 Chevy Monte Carlo Transmission will not shift past 1st

I took off a working transmission from one monte carlo and put it on my other monte carlo which did not have any power when going reverse, it also shifted hard.

Now the installed transmission will go in reverse but it will only go into first gear and won't go into the second gear.

The only thing I didn't switch was the convertor because when I installed the transmission there was about a 1/4 inch gap between the convertor and flywheel. I ended up putting washers to make up for the 1/4 space.

Should I remove the washers? If I do this there will be a 1/4 inch space between the transmission housing and the convertor, will this be a problem.

Should I replace the convertor with the original?
This 1/4 inch spacing will still be there.

What does the cable that connects from the carb to the inside the transmission do. One monte had it connected but the other did not.

Thank you