1945 Craftsman 101.07403 CNC Conversion

The simple solution to the spindle encoder would be a couple of gear tooth detectors sensing the spindle bull gear.

A third one would be needed for index, sensing a keyway or something.

www.pico-systems.com/bridge_spindle.html

I converted a lathe slightly newer than yours. But deliberately over-specced things just for fun.
bodgesoc.blogspot.com/2015/08/holbrook1.html (and following)

SnailPowered wrote:

Maybe someday, but for now I will be taking baby steps.

My first conversion was nothing like as elaborate as the Holbrook, that was a conversion as a project of it's own to see if I could do one that looked "factory"

My first conversion was a lot less elaborate, and done a lot more cheaply. I didn't really document it very well (this was before I became a Social Media narcissist) but there are some pictures here, though it was mainly documenting making tapered Gibbs: photos.app.goo.gl/nwM9Ze59j3zi5TB77

Lessons-learned from that conversion include having the leadscrew bearing further behind the headstock face to make room for a leadscrew cover and that reflective optos on Vero board covered in epoxy putty are not as good as off-the-shelf inductive proximity switches embedded in drilled holes out of the way of chips and contamination. I can't find a good photo of an installation, but if you look at this photo: photos.app.goo.gl/fWnVETvw7Njy5M6Z6 the hole to the left of the ball-nut block is threaded M8x1 for a proximity sensor. The sensor detects two shallow holes drilled in the cross-slide at each extent of travel. There is a very similar arrangement for the saddle, you can _just_ make out the target in this photo, in the side of the slideway near the front of the tailstock: photos.app.goo.gl/gB5zjg3uaZPBKCtQ8 It is a shallow hole, in this case plugged with a Delrin disc to keep it from getting contaminated with swarf. (don't use an aluminium plug, the sensors can still "see" aluminium when surrounded by iron).
If embedding in the machine castings then you need the shielded style. like this: www.ebay.co.uk/itm/123391003334 with the threads all the way to the end. The type with the shorter threads are more sensitive, but permanently detect the metal they are embedded in, which is no use. You probably want a short detection distance (that one is 1mm) for a sliding-past detection.
NPN can be interfaced to the parport as they act as a switch-to-ground, though they need at least 6V as a power supply to operate. PNP won't (easily) work with a parport as they source V+ when activated. Of course, if you use a BoB rather than wiring direct to a parport this probably is less of a concern.