First to say: Correct year
First item on the list is go buy a book from ATSG on your transmission
- either from the site or a local trans shop.
Excellent instruction book and has an exploded views and good tech specs.
Kickdown switch is only for a forced WOT downshift.
Modulator controls 'when' the upshift happens as determined by pedal position - vacuum tells the load - light throttle, sooner upshifts; heavy throttle, later upshifts.
I would go back to OE design and start from there.
Fairbanks makes excellent shift kits from my experience.
If second gear not happening, clutches burnt - oil smell would smell burnt, or servo band needs adjustment, maybe, but not likely.