As expected, there were some issues with my header include files, so had to change the Makefile and include the following lines:
CFLAGS += -I/usr/include/
CFLAGS += -I/usr/include/linux/
CFLAGS += -I/home/linux-126.96.36.199/include
(the last one is the custom directory where I untarred the kernel source.)
In addition, I also had to copy the following files from the kernel source directory:
After moving all the files, the compilation went smoothly and produced all the .o files; however, it is now stuck at the last step of actually making it a kernel module using "modpost". More information coming soon.