rebuilding an engine makes it to new or better than new spec. when rebuilding a motor, you'd be replacing everything or upgrading things along the way. you'd typically change all seals, bearings, gaskets, water pump, belts including timing, probably pistons, con rods, oil pump, etc etc etc.
if you go a rebuild route, your gonna need a machine shop to rehone the block for the new pistons, etc. also if you rebuild you can add aftermarket high perf stuff too, instead of just going with factory.