I didn't realize that about the water pump/fan. I replaced a cheap single core rad with plastic sides to a cold case aluminum rad with fans attached. I knew that getting the fan shroud to fit the aluminum rad would have been a pain, so I chose electric fans as the easy option. Expensive, but hopefully lasts a long time. I have automatic trans, so I did need a new flex plate that fit one piece rear main. Mini starter was also required.
All in, I probably spent 20K to restore a $500 truck. It was my first, and of course I am not finished, as I am working on fixing the truck bed now. It was a frame off restore, and we replaced all wear parts and things we questioned along the way, hoping it would be like a new/old truck. Compared to actual new trucks, it isn't a bad price, and it has a lot of character.
I also just added the carb cheater to try to help tune out a little stutter I have with the Holley.
I think no matter which way you go, there will be positives and negatives. If you go LS, you have to worry about electronics. If you go with the bigger engine, you use premium and have to worry about the rest of the drive line, which can get expensive. If you go with the smaller engine, you can't take off as fast as you may want.
I don't have a posi rear end currently, and am thinking of adding it for more traction in the winter, but that would also affect your take off.