Welcome to AF. Thats a nice project!
I do not understand the engine swap theory.
Too much HP? Why? Is this a safety thing because he thinks you will drive the whiz out of it and kill yourself? If yes, then simply drive it with a mature, law-abiding attitude.
At your age, I was building a '79 Mustang that was decently fast. But I drove it relatively conservatively because I did not want to break or wreck the car in which I had put so much of my own effort and hard-earned money. IMHO getting involved in fixing a car is a great way to encourage mature driving attitudes.
It looks as if the 351 engine has been modded. If it is a radical engine (lots of revs, high-end power, noise etc) you can easily de-tune the engine by installing a mild-spec camshaft. This will decrease peak HP, increase low-end power and torque, smooth-out the idle and generally make for a much more pleasant-to-drive (but less powerful) engine.
Very quiet mufflers will help too, slightly less power but a more comfortable driving experience.
Finally, vintage 289 engines are getting pretty rare these days. Some 289 blocks use a 5-bolt bell-housing, not the 6-bolt pattern that the 351 uses. So if you were lucky enough to find a correct 289, you might also have to swap the trans....... or get an adaptor, if they are available.