I feel like i need to insert this bit of code in the sketch but not sure where.
digitalWrite(latchPin, LOW);
shiftOut(dataPin, clockPin, MSBFIRST, (encoderValue));
digitalWrite(latchPin, HIGH); delay(1000);
delay(1000);
Where does that read the encoder value? Where does that constrain the encoder value?
Why are there two delays()?
Do you want us to wait two days to respond to your request for help?
When do you want the encoder value to be shown on the 7 segment display?