I had to shift into 5th but sht into 3rd, made the engine go way past redline for a half a second, and now a grinding like noise is coming from the tran and barely accelerates quite often. If its a major problem I have to get rid of it I DONT WANT THAT!

 

When the engine over-reved, pistons collided with valves. At the very least the "top end" of the motor is damaged. Its also possible the trans is damaged as well. Do NOT start the car. Get it to a shop or have someone knowledgable help you pull the head and look for the likely damage.

 

Yes....doing what you did is BAD. It's the only way to rev past the rev-limiter.