Small block help

late 70's 360 heads will work well. If you find 360 "swirl port" heads from the late 80's, even better. Magnum heads are even better than that, but have a different valve train.

Swapping in a 727 is a good way to beef up the driveline. However, if you stick to the 904 and put some money into it, it'll survive and have less rotating weight, making the car a bit quicker, and perhaps giving better MPG.

Rear axle could be an 8.25" if the car is the one in your avatar. Otherwise its a 7.25" and needs to be replaced sooner than later. A 9" rear is fine, but if you are trying to save cash, an 8.25" is low budget, an 8.75" is higher budget, and the 9" will take time and cash to get it to fit. An 8.25" should be fine for what you want to do. Just be sure its not one of the crazy high (numerically low) ratios like 2.54 or 2.41. Most of these were 2.71, and will accomodate gear changes for better ratios, like 3.23/3.55/3.91/4.11. The other ratios have a different case that cannot hold the bigger ring gears.