Hi Jay,
Welcome to the site!
Question #1: Removing Rivets
Step 1 - Select Your Drill Bit
The first thing you should do is spend time carefully choosing the right drill bit for your project. The drill bit needs to be slightly bigger than the stem of the rivet but smaller than the head. The purpose of drilling through the rivet isn't to drill right though; it's simply to take the head off so that the fastening can be removed. The drill bit you choose should be able to cut this head.
Step 2 - Prepare
Put the drill bit into the drill and tighten the chuck up. Make sure that you support your metal work properly so that you can safely and easily work on the rivet in question.
Some rivets have a center indent while others have a completely smooth head. If yours are smooth, hammer the tip of a small punch into it to create an indent for guide.
Step 3 - Drill
Place the tip of the bit in the center of the rivet head and start drilling, but keep the speed low at this point. It can be difficult not to skid everywhere when drilling rivets which is why you will need start slowly. Once the head comes away from the body of the rivet stop immediately. Do this quickly because carrying on could cause damage.
Step 4 - Remove the Rest of the Rivet
If the rivet hasn't come out already due to the vibrations, then you can simply remove the rest of the rivet by using the center punch and hammer. Put the punch onto the rivet stem and then give it a hit; this should make the rest of the rivet fall out. If you have done this carefully and properly then the metal around the rivet should not be damaged at all.
Step 5 - Repeat on Other Rivets
Repeat the process on other rivets until you have removed all of them.
Question #2: How to change gear ratio
A couple different ways to go about it. The easiest way is to replace the whole center section (3rd Member or Pumpkin, as it commonly referred as). This makes gear changes relatively simple (Swap out one for another). Here is an good thread on that question:
http://www.legendsracer.com/index.php?topic=3935.01) Basically; jack up the rear end of the car and remove the wheels and drive shaft, pull the drain plug on the bottom of the rear end housing and drain the oil into a pan. While that is draining, move back to the axles. There will be a hole in the hub that allows you access to the 4 bolts (on each side) that release the axles. Pull the axles loose from the center section. Move back under the car and undo the 10 nuts (or bolts) that hold the center section to the rear end housing. Bolt in the center section that has the gear of your choice. Reverse the process to install. Note that this is a good time to replace wheel bearings and seals.
2) Install a new ring gear and pinion gear (with the gearing of your choice). With limited mechanical skills (and I am going to guess tools), this is better left to a professional. Find a good rear end specialist, or someone that knows how to properly install ring and pinion gears.
I hope those answers help you some.
Steve