I'm trying to adjust my clutch but am having trouble understanding exactly what "freeplay" means. Is it how much I can pull the lever until it becomes more difficult (clutch springs activating) to pull? Because I can loosen it all the way out/in without any freeplay of the lever itself.

The reason I am concerned is because I don't think that it is disengaging all the way. With the wheel off the ground, it starts spinning the second I put it in gear, even with the clutch pulled in.

Also, if I put the bike in gear...put it back in neutral...then put it back in gear (without ever letting off the clutch) I still get loud clunks going into gear. Should it be very easy/quiet going into gear since all of the moving parts in the gearbox have stopped?? (like a manual shift car)

 

Free play is basically the movement of the lever before it begins to pull the cable (0.4 to 0.8 inch's). cables stretch over time & sometimes you have to adjust the cable at the other end if you run out of adjustment at the top. Wheels spinning while on the center stand, even with the clutch in, is not unusual for most bikes with a wet clutch. If the bike creeps forward while off the stand with the clutch in, well that's a different story. Clunking going into 1st, just about all of my bikes did that.

 

if the bike has done a high mileage, the clutch basket, plates and driven plates may be worn. The plates locate on the clutch basket with small tangs in grooves and if the tangs get burred up or the grooves have wear in them then the clutch can't disengage properly and cause clutch 'drag' as you are experiencing when in gear but with the clutch lever pulled in. Try slackening the cable at the lever end then take up the slack at the clutch lever on the engine side to give a clearance of around 3mm between the faces of the handlebar clutch lever faces or 15-20mm at the clutch lever end. If this doesn't help then you'll have to take the clutch cover off and dismantle the basket so you can check all the plates and driven plates and the slots and tangs for wear, replacing if necessary. Not a hard job to do but get a manual, Haynes or whatever for proper procedures and pictures to help you. Just another thought: Is the cable lubricated and routed properly, as this would cause similar symptoms? Try checking that first!