Yep, you understood me correctly. I am using the original 1990 shifter on the 1997 transmission. Thanks for telling me about the differences. I never would have guessed that since the towers look identical on both transmissions. I think I will try to get a 1994-up stub lever as you suggested. That sounds like the easiest solution. What you said makes a lot of sense too, because it's only the gears in the middle of the shifter that aren't engaging, so I kind of got the feeling that the stub lever wasn't going deep enough in the middle of its range (3rd and 4th). I think that's almost certainly the problem.
Some further advice I would give in addition to changing the stub lever if anyone else ever attempts to swap a pre-1994 transmission for a 1994-up transmission with the 4 cylinder M5OD is that you also have to use your old clutch slave in the new transmission instead of using the 1994-up clutch slave that comes in the newer transmission. They are nearly identical, but although the quick connects on the clutch line look identical, the 1994-up quick connect has a recess just a few millimeters longer than the recess on the pre-1994 quick connect making the new clutch slave incompatible with the older clutch line. I didn't know that and had to take the new transmission all the way back out and swap clutch slaves because of this very minor difference, so just a word of advice if anyone else ever tries this. Luckily the older clutch slave will bolt right in to the newer transmission without any modifications needing to be made; only two bolts. You want to use the bolts from the new transmission as they are a slightly thinner diameter than the older bolts, but they fit perfectly well in the older clutch slave and with a little effort the older clutch slave fits fine in the newer transmissions. Those are the only things I have found that were incompatible though; just the clutch slave and the stub lever on the shifter. No other incompatibilities that I have found.