Yep, that handguard "needs fitting" and to be honest, you would do better to read my Restoration thread in the Workbench section and get one from the supplier I mentioned--which already comes with the spring steel clips.
I just remembered that yours is *not* from the Russian Contract, so someone out there does make reproduction rear sights, but I can't find them right now, I think you need to see where I reference them and then feed it into the Wayback Machine. From what I remember, they were not cheap.
Did you ever confirm if the second screw hole is under the current rear sight? The nightmare would be if its where the dovetail goes.
While its a bit larger, a Krag-Jorgensen rear sight will fit in the same screw holes. In fact I have seen some images online of 1895s with Krag rear sights on them.