I have checked the 1968 Edition of the 1965-68 Parts & Accy Catalog, the 1975 Final Issue of the 1965-72 Parts & Accy Catalog, and the 1967 Only Edition of the Parts & Accy Book. Looks like you, as well as other '67 owners are "lucky" enough to have had one of two different size bearings; both different than 65-66 and 68 Mustangs. One is Part # C4OZ-3517-A which is listed as 1-5/16 OD, and is the same as for 1965-67 Fairlanes and Falcons with Manual Steering. The other is Part # C3DZ-3517-A,and is listed as 1.44" OD, and shown for 1967 with Fixed Column only. The Upper Bearing Sleeve appears to be the same for all 1965-67 Mustangs, and is Part # B1AZ-3518-A (0.98 ID, 0.5 thick), later replaced by Part # C1SZ-3518-B (1.04 ID, 0.352 thick). And the spring (which yes you should have) is Part # C6OZ-3520-A for 1967-68 289's, and C7OZ-3520-A for 1967-68 390's (this spring is also the same as used on 1967 Fairlanes and Falcons.
As far as your steering shaft, I personally have not seen one that appears that it was two pieces welded together. Of course a lot depends on how you plan to drive it, but if it were me, and the weld is that readily apparent, I'd be looking for another.
Hope this helps,
Bob