That exhaust should be fine. I was talking to Brent about heat wrap before, and Jake was using some stuff on a sport bike that you could put your hand on the wrap, and it would be cool to the touch. So, you will definitely be able to come up with something, to avoid any heating issues.
Or… you could just be awesome, and run a 5" dump out of the hood 
Also, just looking at this, the interior is obviously going to be pretty custom when you’re all done with it. Do you plan on carpeting it, or are you just going to paint it and leave it race car style? I would be curious to see how the interior comes out.
–mark