Jim,
Apparently, StuffIt Expander is working since the tools were successfully decoded.
Normally, a .sit compression would protect the Mac file structure (a resource fork and a data fork) as well. Something may have happened to that file during download/transfer, though. A new download/transfer could perhaps be tested. Also, some .sit files have been compressed in a format that requires a newer StuffIt Expander version.
The following archive, for example, contains many older communications programs (see the abstracts text file). Both BinHex (.hqx) and MacBinary (.bin) downloads are OK (do not attempt to carry out any decoding/decompression until on the PB 180).
http://ftp.funet.fi/pub/mac/info-mac/_Communication/_Terminal/
I do not know why ClarisWorks does not work OK. Maybe something with the basic Communications Toolbox in the system, or something with the tools versions. Have you checked whether the ClarisWorks 4 installer or the System 7.1 system installer (Custom Installation) could offer anything of interest? Otherwise, you would just have to concentrate on other terminal emulation utilities with file transfer capabilities. Unfortunately, I do not have access to ClarisWorks (1) nor to a System 7.x computer today, so I cannot help you test this right now.
Jan