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A snatching shift indicates low fluid. Put the car in park and with the engine running check the level on the transmission dip stick. If low you can top it up by adding extra fluid via the dip stick tube: add about a pint at a time and check the level between top ups.
The knock sensor might have been triggered by heavy shifts so I would reset the error code and run the car with a full transmission and see if the code comes back. If the knock sensor if triggered the ECM on most modern cars may put the transmission into a limp home 'safe' mode. With luck in 1997 such things were yet to be enacted. If so just make sure the timing and all functions are OK on the engine.
If the car is pinging you will set a knock sensor code.'
This comes from bad gas and running lean., You really need this professionally inspected to rule out the basics. I have seen alot of nissans with the knock sensor code stored but the light is still off.
Fill up the tank with high octane chevron and some techron injector cleaner and clear the light. If it stays off for a couple days then go get it inspected. Even if the code is stored it will still pass as long as the light is still off and the monitors have run.
I would have the charging system checked for over-voltage and AC ripple. There maybe a hidden wire harness problem if the charging system is okay. Wiggle test the wire harness while the engine is running to help locate the problem area. That is way to many parts replaced.