It shouldn't matter what position the selector lever is in... the arms should fully raise in either draft or position control when the control lever is fully raised.
Something looks strange about the geometry of the lift arms. Do the lift arms/crank come up by the seat when fully raised? Do you have another pic of that?
Could be that it simply has the wrong lift rods... or they're fully extended so they're longer than necessary.... or not correctly positioned on the lift arms. Several possibilities.
As far as that street elbow on the remote valve... you can either remove it or get the correct hydraulic style steel fitting that should have enough clearance for the selctor lever to clear past it.