Wow. Really cool idea...
I think that bike was Yamaha's first twin, and I think it was a Showa motor, and I'm pretty sure they stomped Harley's a-- in dirt track racing a couple of years in a row back in '68 or '69, I can't remember.
Okay, let's talk bar flop. The controls will adjust easily, just loosen them up and rotate them around as you're flopping the bars, no big deal. The key to safety on your throttle cables is making sure that you do NOT change the routing, it still needs to arc out in a generous radius. With the bars flopped, it might stick out farther (larger radius) and if it's too far out so that it blows over on your knuckles while you're at highway speeds. I don't think you can get shorter cables unless you have them custom made which is very expensive. I'm pretty sure they are plastic coated metal sleeves with twisted wire inside, with the regular barrel ends to connect to the carb and throttle. To shorten it, you'll need to remove it (pay careful attention to how it's routed around the frame and bars and tank) then pull all the slack to one end, trim the other end with dykes to the length you want, then attach a new barrel end (clamp and solder according to instructions).
The problem is the brakes. I don't remember exactly, but it seems like the earliest models of that bike had a drum for front brakes, and I don't think they got disc brakes on the front until later. Which brakes do you have on the front? If you're using a drum brake then you can shorten the brake line in a similar fashion to the throttle cables. If it's a disc brake on the front, you may have to live with the brake line you've got unless you want to have one custom made, which might be $150 or more. I would suggest making a larger radius where the line comes off the fork and onto the disc caliper, that should take some of the slack off the upper end. There is a clamp on the forks (or maybe it's the triple trees, I can't remember) that holds the brake line in place, be sure and loosen that before you start flopping the bars.
Also, when you think you're done, start the bike and let it idle, then turn the handlebars from lock to lock (all the way left to all the way right) a couple of times and see if the idle speed changes (it should NOT change at all). Then turn it to left lock and pop the throttle, see if it hangs up at all, then turn to to right lock and pop the throttle, see if it hangs up.
Clutch cable is another issue. You can't shorten that one, either, you'll have to order one custom, although I'm pretty sure that cable with interchange with others in the Yamaha family in the same decade, you might want to check to see if other models have similar ends in a shorter size. I'm not at the shop right now and I don't have access to any Yamaha parts books here, so I'll have to get back to you on that one.
I'd like to see a pic when you get done. Sounds like fun...