Pulling/sealing engine

As above, I would check all the bearings. Being that old, they could have deteriorated from acids in the oil. I'd inspect the oil pump and measure to specs, and if good, keep it. Inspect the oil pump drive gear and the matching gear on the cam for any signs of wear; if any, shows up, then a new one is warranted. That gear is a weak point. Clean out the pressure relief valve in the oil pump.

Rings are another matter.... the front bore on inlines tend to wear faster so you might get into a rebore it you go at that seriously. If the bores are clean, I would leave it alone.

And yes on the water jacket cleanup and freeze plugs.

While the head is at the shop, have it milled .060" The new head gasket will be thicker than the original and that will cost you some compression, which is low on these anyway, and the .060" mill will add a bit or torque.

Absolutely replace the timing chain; they wear badly.

Make sure the exhaust manifold flange to the head is flat. It might take some work with a belt sander to get good and flat.