Common Source JFET Amplifier
The gain of this circuit isn't set by the ratio of R2 to R1. The capacitor CS is shorting out R1, and helps with the gain. However, to do this at audio frequencies, the capacitor value needs to be much larger.

This circuit is an excellent example for learning LTspice. I suggest trying it, and you can get help from the LTspice mailing list if you need it. To get help from them, you will need to correctly upload an LTspice schematic showing what you tried.

The job of R1 is to set the drain-to-source current. The gate voltage will be about 0V. When the supply is turned on, the JFET will start to conduct, and the source voltage will rise because of the current in R1. It will rise until the JFET begins to turn off. This provides a little bit of negative feedback, and it will find an equilbrium point. This equilibrium point is set by the value of R1, and it should be adjusted until you have about 10mA, which is 0.75V across the 75 Ohm R1. 

The resistor R2 can't be so large that the voltage on the source of J1 is too close to the voltage on the drain of J1. This is your analog output, and there needs to be a range of output where the drain voltage can vary without becoming equal to or less than the source voltage. That is the problem with the existing design.

This topic is called 'how to bias a transistor' and it is lots of fun. Search for "how to bias a JFET"

I tried the same circuit in LTspice, except I used a U309 JFET and a 9V supply instead of a J310 and a 5V supply. For my transistor, the values R2=750, R1=75, and C1=100uF gave reasonable results. The values that work will depend on the parameters of the transistor, and I don't expect them to work with the J310. Usually, IDSS and VGS(off) are enough to do the bias calculations, and these values are in the datasheet.