[TEXAS-HOTROD]

Sounds like a nice project.
You have many high expectations, which isn't a bad thing. Modding a car (Vette) to go faster and quicker, and carve corners better always makes for a cooler ride. Under any circumstances, don't cut anything to make a modification. Unbolting a part and installing something different in its place is ok, it can always be put back to stock. Just don't butcher it.

Let's face it. The stock engines were turds. Find a 1988 and later 4-bolt block and start from there, it can accept a rollerized cam w/o having to use the expensive retrofit lifters needed for the earlier blocks. A roller cam will have far better performance than a flat tappet cam and still have a stealthy idle.

Get some good heads. Canfield produces affordable aluminum castings. For ultimate performance, you can't beat a set of AFRs. The ultimate system would be semi-stock engine combo with the use of a singl turbo/blow-through carb set up. Easily good for 500 hp and very street friendly.
Fuel injection? A maxed-out TPI is good for 300 to 320 h.p., usually restricting a powerful combo. There's better potential in an LT1 system, and in stock form they do perform amazingly well. You can ditch the Opti-spark distributor, have the back of the intake drilled out to accept a small-capped HEI and use TPI electronics. The only bad thing about LT1s, you can't mix and match heads, intakes and water pumps/timing covers. You have to almost use the whole engine. They make for good 383 candidates too.

The car is now automatic? It'll be difficult to install a gear box, but it is doable though. Just depends on what you prefer, There's nothing like rowing through the gears. A Muncie with a Hurst Verti-gate shifter would be the ultimate. A T-5 box would be good, 5th gear is overdriven for better highway rpms. 6 speed units are expensive, use an odd-ball flywheel (I think), need a hydraulic pedal system, are heavy and longer than a stock-style tranny. I'm not sure, but the main crossmember might be in the way.
A 700R4 can be a good performer, are easily modofied and hold up to respectable power levels.
I can see where this could be leading. Using a late model engine, TPI/LT1 system, modern dash and interrior would make for a killer theme. Might as well scrounge up some late model Vette wheels too. It would look sweet w/a set of '07 Z06 wheels.

Keep a post on what you decide.
Good luck.