Help with my first engine build (5.9 Magnum)

As others have said, it looks like it needs to be bored. Whether or not you do that depends on what you're looking for. If you're looking for cheap and quick, hone it as best you can and throw it back together with the new rings and bearings. If you want expensive and if you have a lot of time, send it to the machine shop.

Personally, I would put it together and send it. Same with your heads - lap those valves until most of the deeper pits are gone, assemble, send. I mean, it ran before you took it apart, right? Obviously it won't be perfect, you might get a bit of blow-by, and the valves might not seal as if they were brand new, but so what?

If it were me in your exact situation, I would put it together with what you have and put it in the car. When you're ready to buy aluminum heads you can find another 5.9 short block and send it to the machine shop to be built properly. Then you can put your $2000+ aluminum heads on a fresh short block and your car is only down for a short time while you're swapping the new engine for the old one. And again, if it were me, that would be my plan but I would probably end up running the first engine for 10+ years.