If you decide to do the head gasket , the MP one is a good one to get. Being that its got an aluminum head, it has a weird way they want the head bolts torqued. They give a torque figure, and a note for an additional 1/4 turn for the stretch type head bolts. I'd recommend new head bolts as well.
Typically when i was doing head gaskets on these i would start with a low number on my torque wrench maybe 20 ft lbs. Torque em all in pattern, then 40 ft lbs in pattern and so on up to final torque so as not to warp the head. Then do the additional 1/4 turn in pattern with a breaker bar.
A replacement 2.5L roller tappet cam from a dakota will help with a little more torque, and a quieter top end. Check your junkyard for 4 banger dakotas. You will need the roller tappets with the cam, but can reuse your lifters if they are good.
Additionally on the end of the head where you removed the air pump you can buy a "cam plug" shown below. this is a cover that replaces the seal on that end so you dont see the cam on that end. The camshaft caps are not interchangable, and the aluminum caps are the bearing surface. They should have arrows cast in for which direction faces forward, and be numbered 1 to 5. Check before removal, and mark em if needed.
An accel super stock coil or pertronix ignitor 3 will help too.