I can't use the undamaged gen 2 frame because it was registered in the state of New South Wales and anything written off there can never be re-registered in Australia. That is both a waste and really, really annoying.
Would it be possible to cut the number area out of the bad frame and weld it into the good frame?
Ride safe, Ted
Short answer: No. That would be "rebirthing" - highly illegal and the reason given by the authorities for making everything a statutory writeoff.
Long answer: The number is engraved/etched/stamped on the side of the headstock. Interfering with it would be obvious even to blind freddy and cutting and welding it into another frame would be a big job. You'd have to be a really good welder to replicate the factory welds too. If I sold it or it was involved in an accident and anybody looked closely ... see the short answer.
The old way was to buy a crashed vehicle cheaply and transfer the identity onto a stolen one. So the gumbyment introduced all sorts of checks - with fees of course - to show proof of where you got the parts to fix your crashed one. I rebuilt several myself under that system and thought it worked fine, at least until the vultures doing the inspections had a cash grab and it suddenly cost more in fees than actual repairs.
I don't know how the 'criminal gangs' were still rebirthing, but New South Wales went it alone and decided that you could no longer repair anything and put it back on the road. Because the VIN is on a national register it can never be used again in Australia.
I also have a perfect frame from a 2016 Honda CBR300R. It could have been repaired with second hand parts for a few hundred dollars. Bent levers and scratches and some cracked plastic. But because NSW it can only ever be spare parts. Except the frame - because that is the bit with the ID on it. I bought it for the engine, but having to throw the rest away is such a waste.