I just went out and got a new shift knob that i had my eye on for a while. However when I installed it I realized there was about an inch and a half gap between the shift boot and the knob. Is there anyway to fix this? This may sound stupid but can i just cut the shifter...the part with the threads on it? Any ideas?

For 1/2", you can just cutr 1/2" of the threads off. If you want to go lower, get yourself a 12mm - 1.25 die, cut the shifter, and add threads. You can cut as much as you want, but the rethreading will get tougher when you get onto the fatter part of the shifter column (which is about 14mm).