New Project: ‘64 Valiant Wagon

The later transmissions have many upgrades, and got stronger over the years.
If you upgrade to an engine with a 67 up crank, it will have a different convertor support hole, and needs a bushing to use the 66 and older convertors. Not a big deal except
I have heard that finding a small-nose performance convertor is getting harder; usually neccessating a custom build.
In the long run, IMO, I think it would be best to swap the trans out when you upgrade the engine; because now you can buy off-the-shelf TCs.

However;
You can upgrade the guts of your early 904 case to 67 up parts and so get the TC interchangeability and still keep the B&T driveshaft, if you so desire. Ya gotta love Mopars. That B&T is not particularly weak, and you cannot put much tire into those factory rear tubs, so there is no hurry to get rid of it.
Lots of guys run their warmed up 360s thru that trans and driveshaft. Even the 7.25 will take some abuse if you install a SG, so it don't peg-leg. Just don't unload 400 hp into it all at once,lol. Get this; if you upgrade to disc brakes on the front, you can even leave the 9inch drums in the back, running no proportioning valve.

I have been kindof looking for a nice old wagon similar to yours to drop my HO367 4-speed into. But I would eventually tub it and it would get an 8.75... and probably ladder bars, cuz my tire-smoking days are over.
But it looks like a Dakota may be coming home to roost this summer.........so we will see.
Happy HotRodding