Do I need the 4" donut wheel that was attached to the middle of the front drive axle? What was it for?

That's to dampen driveline vibration. As the car ages, the springs and engine mounts will start to sag. That changes the angle of the half shafts / cv joints, and changes the characteristics that can set up those vibrations. If you remove that weight, there's a very good chance you will not notice any vibration.