You should be able to just clean the sensor off, provided it isn't physically damaged, but, you really need to find where those shavings are coming from.

 

Do you know if you have an LSD differential or a open diff. If you don't know. Pick up the back end and spin the tires. If both tire spin the same direction then you have a LSD diff. If doesn't then its an open diff. The metal could be coming from the locking clips holding the plates together for the LSD. or on an open diff. It could be metal debris from the ring and pinion bearing. Remove the drive shaft and check the torque on the nut for the pinion shaft. It could be loose.

 

I replaced the speed sensor with a new one and neither the speedometer nor the odometer are fixed. I changed the engine oil for the first time the other day (I haven't had the truck long) and the oil that came out was alarmingly low. I dont see how this would affect the speedometer/odometer issue though. I have since then driven in reverse multiple times and i have had 0 issues with it getting stuck. Although I do hear a humming noise coming from the rear differential while coasting. Also, the check engine light has turn on but not the brake or abs light. Any thoughts?

 

Time to go after the wiring.