if the bottom end is good (block, crank, pistons&rings, ect...) then swap the heads and the cam for better ones. that is the main thing holding you back, since emissions were really killing the horses then. Get some good aftermarket heads (i hear trick flow heads are sweet for the 350) and get a good cam for the particular head and the type of driving of the car... make sure to see if you need a single or a dual pattern cam... its confusing so make sure to ask the manufacturer what cam to pick... and dont go too big...
also, throw some long tube headers, an edelbrock performer rpm intake, and a holley 750 cfm carb on it...
all this together i have seen dynos where they got 416 horsepower at the crank and over 400 lb/ft of torque between 2500 and 5000 rpm. thats a sweet daily driver as long as you dont constantly beat it...
any more power and you might need a 4 bolt block, since the one in your car is likely a 2 bolt. if you just want a little more pep and still have money other than gas money lol i would simply get the heads rebuilt and put an edelbrock performer cam in it and maybe a performer eps intake and a smaller 4 barrel carb. this should be less than 1500 bucks easily and you should have well over 200 horsepower, prolly in the 250ish range??