I actually have been also considering an 351. It is a stronger block and capable of handling 600hp with stock internals. I already have a 302 which is why I'm going down this road though, so I might build the 302, run it until something blows up, and then build a 351. They share the same bellhousing bolt pattern and engine mounts. The only real difference is the deck height of the 351 which I think is like an inch taller. No big deal. I would consider the 351 "Stage 2" when forced induction is introduced.
I agree..the 460 would be an amazing motor to cram in there, but not practical from a streetability and handling performance standpoint. The thing I love about the 302 is that it is the same weight as the 7M, but shorter, bringing the center of mass closer toward the center of the car. The 351 is about 60 lbs heavier than the 302, so when the time comes that will need to be accounted for.
Still doing rust repair currently....it's starting to get me down