Plugs out and the gearbox in 2nd or 3rd gear it shouldn't be difficult to roll the bike and watch the flywheel spin.
It this with the starter motor still removed?
Occasionally, the "nose" of the starter (where the 9 tooth gear that engages the flywheel) can break or be damaged if the bendix doesn't disengage when the engine fires up - usually from accumulation of dried up grease and dust in the gear/shaft assembly. Your nose gear appears used and slightly worn, but from what I can tell, not in a "replace me now" state.
The Bosch starters are heavy, and suck the most current to startup the engine, but they are rebuildable an pretty robust. Valeo makes starters for the later model airheads which can also work in your bike. These are a little light in weight and draw less starting current. They had a period of time where some would drop magnets (bad adhesive) and lockup the starter, but this has long since been resolved. They don't sell rebuild parts for them though. They can be a little cheaper.
Then, you also have the Nippendenso starters - which you can buy from Rick at Motorrad Elektrik:
http://www.motoelekt.com/starter.htmThese are more money, but they are starters from Toyota trucks and have excellent reputation and are basically a drop in replacement.
So, you've got options!