98 ford mustang shift stick started making a clanking sound yesterday when backing up

Sorry old son but your clutch sounds like it has gone to the big junk yard in the sky reserved for dead clutches . When a clutch starts to slip it will continue to do so until that is all it will do . solution a new clutch is required .

I think I would pull the distributor out and see if the gears are still there. And check the shaft that runs down to the pump.

sound like u need a new belt. its slipping or a pulley is bad

Automatic or stick ?
If its an automatic, it could be something in the torque converter or transmission. The torque converter clutch could be stuck.

check fuses for brake shift solenoid. the brake pedal position switch is a fuse under the hood. inside the passenger compartment, check every fuse. that's a start for not having more information.

No, it means you do have a huge problem in the engine. You should not ever hear any knocking, banging, or clanking from the engine.

Timing issue
Idle setting

I'm afraid what you're describing sounds like your bearings went out. Your engine is probably seized up or blown. There is no cheap or easy fix for this problem, your engine will have to be rebuilt or replaced.

sounds like you have a worn or misadjusted clutch, but if your clutch is self adjusting meaning a operated with hydraulic pressure (Brake Fluid) then you could have leaking slave cylinder that maybe wetting the clutch disc with brake fluid causing a slippage, or just a worn clutch, in which case you will need to inspect inside bellhousing...

check the crankshaft damper is not loose or worn.Main bearings could have worn out.Drain oil and check for traces of metal.