bringing Formula back to glory

I purchased my 89 Firebird a few months ago. It has the 5.7 engine with 200k+ on it. It runs great. Spins tires when I ask, gives power at any speed, and can regularly put a hurtin on plenty of ricers and Mustangs. Now, here is where I need the help of some of you more tech/mechanically savvy guys.
It was suggested to me that I may want to rebuild the engine (considering the age and miles on it), switch out the cam, and add headers. What kind of performance changes can I expect with this? I wouldn't mind a high-12/low-13 sec car. I don't want to go crazy, I just want to be able to go light to light with most cars.
What do you think about making these changes as opposed to or along with a new performance chip? Would it matter? And what would it take to hang with some Vettes? I here the 5.7 in the Formula is the de-tuned Vette engine. So, what would it take to tune that mo-fo?
I'm not too mechanically intelligent, so please break it down easily for me.

I myself like to strip all the electronics off most
of the time, but not always, is it a tune port
just sitting in these cars no matter what year 80, 89 or 2000, u know you got something worth keeping
as for specs if your going to rebuild folks like volkerc and hyspi might be up on new parts an #s
if thats the route you want to take
if it runs good and dont smoke etc,you might think about maintaning the body first

As far as I understand, it is a TPI. What do you mean strip the electronics? You're blowing my mind.