TWo things:
On the flywheel - if it was used to balance the crank (this will depend on whether or not the shop took weight offit in order to make the rotating assembly come into balance) then it's not going to work on the 318. But - any neutral balanced flywheel will.
On the stroker - yes, turning it on and not letting it get to operating temp for a few minutes will cause condensation and milky bits around the dip stick and breathers. What water pump are you using, and what block is it based on?