I don't think the hook is used now, and I don't think the hook would affect the strike. As long as the deadbolt catches behind the strike it should be fine, just like it does now in the current setup.

We will need to cut out at least 3/4 of an inch on the 1 1/4" part of the photo so the deadbolt will actually pass once the strike is open.

I need to find a strike that can cover all the meat that is cut out and be strong enough to handle a deadbolt.