9398 reduction change
This modification won't change the rate of reduction.

You can calculate the ratio of the angular velocities of two adjacent gearwheels as

i12 = w2/w1 = n1/n2

where w is the angular velocity and n is the number of teeth of the gears. Hence the original reduction reads as:

i12*i23*i34*i45*i56 = 12/20 * 16/16 * 20/28 * 12/20 * 12/20 = 27/175 = 0.1543

while the modified is:

i12*i23*i34*i45 = 12/20 * 12/20 * 20/28 * 12/20 = 27/175 = 0.1543

What you did is you simply removed the 16/16 and replaced the 12/20 gears, which results in the same reduction because the order of the multiplication is arbitrary.

To the second question:

You can change the 12-20 gears to 16-24 ones to fit the increased distance. In this case, the new reduction is

i12*i23*i34*i45 = 16/24 * 12/20 * 20/28 * 12/20 = 6/35 = 0.1714

Note that the new gears may intersect parts not shown in the figures.