block welding is a good prospect...
UNLESS there are places that internally that they can't get to. Reading your description of the one block (first?) that may be the case. They'll have to pressure test it before and after each weld, and that may be cost prohibitive.
fill the cylinders with PBlaster... FILL them.
wait a week. then, using a wood block on the piston top... Whack the piston with a heavy hammer (a couple of pounds or more)like you're mad at your mother in law. repeatedly. If it looses just a little and then stops again repeat the soaking procedure.
you MAY crack/break a piston, but at this point, whats it going to hurt, eh?
Most likely, with any of the blocks, you're going to need to have it bored. I think .030. is the limit for oversize pistons. Have the machine shop bore ONE hole, the worst one. If that one is under .030 oversize, then you're good to go.
Don't be too concerned about surface rust. A good shot peen blasting will take care of the worst of it.
The cranks are cast and not hardened, so, they start to "rust up" on a humid day.
DO NOT order any bearings or pistons and rings until the machine shop calls and tells you what size to get.
A good thing to do is get the specs, and what size bearings are available. That way the machine shop knows how far to go.
If theres a part that a little "iffy" like, say the crank is @ .030 and theres little black marks on one of the journals, I'd say run with it. You're looking for "smooth" not to have holes filled in. The machine shop may hem and haw, but its your crank.
Cylinder boring is another issue, they've got to be spot on, and really nice. otherwise, the rings will "catch" and tear a line up and down your cylinder and you'll spew oil out the exhaust. lots of oil.
This is ONLY true of the distance of piston travel. I've seen shops try to tell a client that they need a new block because the lower part of the bore is as rough as a teenager with acne, but the piston doesn't go there, so who cares.
Heads. they're a "flathead" meaning no valves in them, basically, they're a flat plate with some holes. Have it milled and that should be that (get the copper head gaskets)
Startes are easy. Wander into your auto parts store and buy one for a 1964 chevy nova with the 4 cyl. engine...
If you're worried about it being "marine-ized" take off the back plate from yours, remove the plastic insulator, and put it on the new one before you return the core.
There are no other differences in that starter.
Less than expensive repair alternatives...
Check with the local junior/community colleges in the area. Talk to the auto shop instructor, Chances are, they may have a machine shop on prem, or know of one that does good work. Also try the local "automotive tech" schools, down here, they've got names like ATI, Lincoln tech. The instructors there are always looking for "dead bodies" to bring back to life.