How much metal flake is too much?

This is not in an A-body, but it’s a 727.
I just bought an 83 Ramcharger that had a seized 318. I dropped in a good 318 and got it running to find out that the trans had no reverse.
The transmission would move the truck forwards in drive, 1, and 2. Park holds the truck still, and reverse was basically a second neutral with the truck on the ground. I put it on jack stands and found that every position but park on the gear lever would move the wheels forwards. So reverse, neutral, drive, 1, and 2, would all move the wheels in a forward direction. It also wouldn’t shift into 3rd.
I don’t know much about automatics, but from what I’ve been able to understand is that fluid flow is extremely important, and metal flake cake in the pan is bad.
When I pulled the old engine out, I noticed one of the trans cooler lines was flattened under the oil pan (I didn’t flatten it). I cut the line off and replaced it with some rubber hose.
So my question is, would a new filter and fresh fluid, free of all of this debris fix it? Or am I going to have to pull this thing out and tie a goat to it?

Magnet
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caked up flakes
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I wouldn’t waste the money on fluid and filter at this point as that thing is toast.
It won’t move in drive because the forward clutches are laying in the pan burned up.