someone just referred me to this thread "because they mentioned you in it"... yeah, i know it's an old thread......
yeah i never got the m/t swap done just because of money. or really, the lack thereof. you know how it goes w/ jobs and layoffs and all the things life likes throwing at you... i ended up selling the s/c (and springs too) off the camry separately from the car itself because nobody was interested in buying it in modified form. thankfully it wasn't hard to bring back to stock.
as for the cruise - i betcha the only reason it doesn't work is because you no longer have an auto shifter and its "prnd2l" switch, which incorporates the neutral safety switch. this is also partly related to the clutch switch, if you have one.
here's what i learned when adding OE cruise to my non-cruise equipped gen4 ce v6: there are TWO clutch pedal switches. one at the bottom of the stroke for starting, and another at the very top for disabling cruise. if you don't have cruise, then there's just a bolt w/ a jam nut for adjusting the top-stop of the pedal travel. with cruise, there's a switch similar to the brake light switch that will cancel cruise if you touch the clutch at all. if that switch is not there, cruise will do exactly what you say it's doing, because it thinks you're pressing the clutch. Try to find the 2-pin plug behind the dash in that area (probably behind the heater duct there) and check it out. I dunno about gen3, but gen4 it should be n/c on one pin, and +12v on the other any time the car is on. short this connector and your cruise will work again. Just be aware that putting in the clutch and coasting will cause the cruise control to try and rev up the engine to bring the speed back up, so you will have to pull backwards on the cruise stick or tap the brakes to make it actually cancel.
on that note - you can probably fix the code about the neutral switch by simply shorting that pin on the ecu to make it think it's in neutral all the time. i hear that's how supra guys do their a/t -> m/t swaps. that's what i'd planned to do once i ever got around to actually doing the swap.
oh, and on your axles - i had that exact problem on my 98 this past fall when a misguided auto parts store thought that a/t and m/t axles were interchangeable even though the part numbers were different. when i put the two side by side like you did, i saw exactly the same differences. the parts store guy was shocked that there would actually be a difference.

thankfully, my existing axle wasn't completely busted - it just had a torn boot and was losing grease. it was still driveable.