just going on his nick, avatar, and sig i'd say this guy isn't exactly into Mustang performance and therefore wouldn't be too hot on the idea of a 302 swap
. lol. regardless, it's cool that you want to do something with it instead of just trash it.
anyway, there's a couple things you can do. like take the head off and hog it out a whole bunch. focus on the exhaust side, as the intake side is actually quite large already. i'd say the biggest performance limiters on a motor like that are the exhaust, fuel delivery, and most importantly the TINY little cam. a bigger cam and some roller followers would make a huge difference. they do have decent displacement for a 4-banger.