I checked out your other thread with pics of your CRG kart. Yes you could but I don't think you'll have to mod the keyway. Your 50mm. axle is the correct type type for a 125cc shifter kart. I think Its stock keyway will work fine without mods, you'll just need to mount the engine a little further inboard from where you've got it located in your pics.
Check out these pics to see what I mean, your axle sprocket wont need to be perfectly centered over the key, the sprocket can be offset to the right quite a aways and the key will still be plenty strong to hold up...