Relocating the rear differential 1.25” towards the rear of the vehicle on a 72 Dart

Yep. A lot of people do that. Some relocation boxes even come with additional holes drilled rearward for that purpose.

Before you drill, it may be a good time take a quick X-measurement to ensure the rearend is square to the body. A lot of times, they aren't due to sloppy factory tolerances.