Thank you for all the info!!!
The only spots that need full sanding down and por-15 is right where the clutch is. Seems the old one dripped fluid all over the frame there, caused it to bubble and peel right off.
The rest of the frame is in great shape, just seems worn/dirty. I'm gonna use red scotch brite pad to scuff it and paint the frame.
As far as painting over por-15, when I painted certain engine parts, I por-15 in silver and just topped coated it with high temp clear coat from dupli-color. Holds on real good. I guess as the por-15 is drying, right before it is dry to paint over it.