Lug Studs

So I just got the title for my '93 b2600i and now I feel I can really start working on it.
Anyways my current dilemma started when I noticed a low tire on the rear (no biggie it was a nail already fixed). I took off the cap for the rims and personally think the lug studs are too short and I don't feel safe driving it too much



I'm posting from my iphone so I can't get pics on here easily but that's the link to some pics I took

From what I've searched and found a lot of people grind off the tabs on the hubs. Now do you grind them all the way off or just enough to get the rim to sit inside?
My second question is what size lug studs do y'all use to replace the stock?
It was late in the day to start ripping and a tearing into it so I wanted to have an idea about where I should start tomorrow

Thanks