What should be done to the front suspension while the motor is out of the car?

It looks like the LCA bolt tube weld broke. This has happened to others. People have welded them back, usually with a washer to stiffen it. It seems the factory did a poor job some years, or maybe just during Stretch Cunningham's shift. Your steel looks solid, so should be simple for someone with a welder. If you must pay shop rates, it might be cheaper to get a used K-frame, but V-8 ones are in demand.

The kits are fairly expensive and don't always include the best parts. I have done better by buying individual parts, and just the ones needed. The lower ball joints and idler arms have been worn on my cars. I re-used my upper ball joints and tie rod ends, adding polyurethane boots. Of course, replace all the rubber bushings. See sticky for removing them. I wire-brushed and painted everything, because I enjoy working on clean cars.