Shortening the arm is an older method that has been around for awhile that many still use. The latest method is to go with the stock cable, rerouted in front of the radiator and clutch lever side of the head, and using one of the bearing type clutch levers with a Honda ratio. With the latest method, clutch pull rivals the 125 adn 250's, with little loss in total pull.
If I were in your shoes, and had to mess with the arm anyway, I would probably go with the 5mm modification. However, if you want a certain fix, go back to stock and use the latest method. Only problem is that the cost is just over $100 for a new cable and after market lever.
Rick