I'm in a similar situation with a '57 VW. Currently it very simple to work on but it needs to be freshened up - Do I spend money on the original setup or do I upgrade it?
In my case it is a 40 hp 1200cc mated to a swing axle reduction gear transmission with non-sychronized first gear and a 6VDC electrical system. I'm thinking of replacing the engine with a mild dual port and gutting the electrical to replace it with a 12VDC system while just cleaning up and resealing the transmission. If I get too crazy with engine and transmission swaps, then I'm also looking at suspension, brakes and steering so I can continue to live to enjoy it.