2000 Ford Escort No Reverse

My car was purchased from an older lady. When I brought it home it ran fine for about 3 months. The acceleration became sluggish and after a bottle of Gumout that was fixed, but I became aware of an issue with my reverse. It doesn't go in reverse, or when it does it sounds like i'm driving a manual trans. With the clutch down. The engine just runs really high like i'm in neutral with the gas pedal down. Sometimes it moves, sometimes it doesn't.
I have no issues going forward so far.

The engine is a 2000, but the car itself is a 1998. The new engine was unknowingly dropped into it before we bought it.

I was shown a small arm inside the engine compartment that I was told I could manipulate and it'd adjust the reverse mechanism.

Is there anything inside the engine compartment like that?
If not, is this a fixable problem or will I have to replace the whole trans?