I think $175 is too much...
Yes you can leave the valves in place because the valves sit lower than the gasket surface.
Here in Northern California it cost me $65 to get the head milled. and it was not some shitty machine...It is CBN machine worth alot of money and the finish was ready for metal head gasket.
You should also get the head checked for cracks, hardness and the valves tested.
I would not use 150 grit on the block surface...Best to have it machined too.
If you do not prep the head and block correctly now, rest assured you will be pulling the motor apart in the future for another BHG.
Cheers,
Roy