they are telling you to remove the oil injector setup. its the little tank that holds oil. what you do is remove the tank and lines, then remove the pump. some guys buy a kit that gets rid of this. others do it themselves, and just take the pump off and remove the gear and shaft then reinstall the pump.
my recommedations are a new pipe and reeds. its a good foundation for more mods later on as he gets better, plus it will free up a bit more HP. otherwise leave it stock and change it as he gets better. new suspension always helps, theres cheap ways, and not so cheap ways. a lot of guys now are putting 05 ltz400 rear shocks on. they ride much better that way and can be picked up for pretty cheap. or a 400ex shcok will work too. as for fronts, im not sure. if you want to run banshe shocks...ill sell ya a set, as i have an extra set lying around.