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Excellent news!

14v is normal, looking at the schematic the transformer is feeding both the 12v and 5v regulators.

Yes the regulator and resistor getting hot is normal, that's just them burning off the excess power as heat to regulate it to 5v. once you reinstall bypass caps and chips I would suspect the voltage to drop a bit more on the resistor and for that to get hotter. Note I would not connect this to...

bingo, with it removed are you getting 5V? It should be safe to power up without it. Looks like it’s just there to protect any potential over voltage from a back feed.

If you have a spare 7805 it wouldn't hurt to try and replace it, however it's to be expected that both of those components get really hot in the state that it's in right now. The way a 7805 works (broadly) is that it converts any voltage above 5v into heat, so say you're drawing 1A at 5v and...

In that case there isn’t much left, I’ll review the schematic tonight but I would try and just leave it on, see what chip or part gets really hot.

+1 on the bypass caps, pull them all and see if the voltage comes up, if it does replace them all. I have a gameplan mpu-2 that I just replaced far too many chips before realizing the problem was with the caps pulling the voltage down on the ram chips causing the entire data bus to go all wonky.

Full disclaimer I have not worked on a Skee ball before, however looking at the schematic, it looks like it just regulates the 18v to 12v and 5v. It should be trivial to attach a standard arcade power supply to these points and see if you have any life on the PCB. If the transformer is really...