wow that sounds like an "interesting" setup..
gen2 rear wheel bolts right onto the gen1 setup (can't vouch for gen3), you just need the right caliper carrier with the extra bit for the abs sensor if you want to use that, otherwise it fits fine on the gen1 carrier. The disk etc lines up correctly with the cailiper. The sprocket should transfer but the disk has 6 holes on gen2 vs 5 for gen1 so doesn't transfer. Obvs you'd need the abs ring too from a gen2
You will also need a set of axle spacers from a gen2 tho since there's no cush drive on the gen2 rear so the left-hand axle spacer is different from gen1 but the axle itself is interchangable. I fitted a gen2 rear wheel to a gen1 bike for someone a while back so have been thru this process. I never rode it so have no idea how it compares without the cush drive but apparently the guy is still alive so I guess it works.
Did the speed display ever work in the time you've had it? if it did that would be good, if not, less so.
I initially thought that gen2+ calculated the speed from the ABS sensors (makes sense, why wouldn't you?), but was recently told it measures the speed from the engine itself (crank position sensor perhaps?) I don't have a gen2 so can't confirm or refute this, I just mention it since it may not work as you expect (e.g. you could go to the effort of fitting a gen2 rear wheel and ithe speedo may still not work).
As far as I'm aware the gen2 would need to be aware of what gear it's in in order to calculate speed from the engine alone (rpm * gear), and Idk if the gen 2 has a gear indicator by default - perhaps someoe who has a gen2 can let us know.
If you want to test whether a second abs sensor gives you a speed reading, you can wire in the second sensor and then just mount it temporarily on the front wheel (abs ring) so you get a signal from each sensor but off the same abs ring. Should be much less work than sourcing and fitting a gen2 rear wheel just to test a theory.
IF the speed on gen2 is calculated from inside the engine, e.g. from a sensor/cable the gen1 engine doesn't have then I'm afraid you'll be SOL on the speedo. The bike where I did the gen2 wheel swap we were doing gen2 wheels on a gen1 bike, but retaining the gen1 instruments, which are quite straightforward to get a speed reading from (compared to gen2), but even that required a fairly custom setup as the two systems seem extremely incompatible.
Even though gen1 uses a hall sensor on the speed sensor bit on the front wheel, that's a voltage-switching hall sensor (3 wires, voltage goes 0v-5v-0v). The abs sensors on the gen2 are also hall sensors but are of the 2-wire current switching type..so voltage stays stable, but current varies instead. So even on that level they're fundamentally incompatible with each other so you can't just swap them over and expect readings :-\
Idk how your buddy has wired up this 2018 display but presumably somewhere they will be a speed sensor input. The easiest might be to see if you can find a gen2 bike whose wires you can follow/copy and figure it out, as there doesn't appear to be a service manual for the gen2 like there is for the gen1, which makes everything more difficult. Otherwise you're down to fiding that speed sensor input and sending it different types of pulses (e.g. voltage switching, current switching) and see if you can get a response from it.
Hope that helps... quite a technical challenge you've got there..
