Steel or Aluminum?

It serves as a heat sink. Don't do it. You'll just shorten it's life and glaze it quicker.

As far as the aluminum vs steel flywheel, I prefer steel, because of the inertia. You will see drop in RPM quicker between shifts with aluminum. You may want a dashpot of sorts for your carb to help with RPM drop between shifts.

It helps with acceleration, but it's sensitive to RPM change, even when you may not want RPM variation.