Lots of stuff already covered here, but some misinformation as well. I'll just add to the mix as a 30-year hotrodder who used to build custom engines and drivelines.
The 302 Ford is a big bore, short stroke. The 305 is a small bore, longer stroke.
Small bores not only limit valve size, but you have to remember that valve size (being a circle inside a circle) is exponential. When you reduce bore size by 10%, you reduce the area available for valve surface by about 16%. You also induce valve shrouding which (contrary to popular belief) is not simply the distance from the valve edge to the cylinder wall, it is the additional area consumed between the curve of the bore and the tangent. That is a technical way of saying: even if you have the same 1.66" valve in a 4" bore, if you put that same 1.66" valve in a 3.5" bore, it will flow less because there is more bore wall close to the valve.
Therefore, a 305 may be 87% the displacement of a 350, but it doesn't have nearly 87% of the power/tq potential of a 350. You can throw all the money you want at a 305 (and some people do), but here it is with rough numbers.
Buy a 305 for $150. Rebuild it yourself with $300 in parts. Throw $2000 worth of goodies at it and congrats, you have a 300-hp motor with 375 lb-ft of torque. That torque peak will come at sky-high RPMs.
Do the same thing with the same parts on a 350 and you have a 450hp motor with 450 lb-ft of torque, better idle, lower torque peak, and something you can actually sell for money.
Throw into the mix the fact that 305s were always destined as a low-output motor, the blocks were cast relatively thin. All of the stock heads are low-compression, poor flowing, and pretty worthless. Trying to make big power with a 305... or even just trying to warm it up a bit... is a pretty pointless thing. You could very easily spend $1000 hopping up a 305 only to find out that you only make as much oomph as a $250 stock 350. IMO, the 305 is a completely disposable engine, and should be disposed of rapidly. In the hotrodding world, most of us would sooner purchase a crate 350 than even turn the key on a 305. Those of us who also have a foot in the GRM world could see the benefit of a running 305 being something to get us on the track. Being on a track and going slow is better than not being on a track at all.
On the bore/stroke thing, bore and stroke have little to do with things in the realm of lower RPM motors. If you spend enough money to make a 305 rev to 6000 rpms, the stroke will be the last of your worries. The old wive's tale of "long stroke makes more torque" is 2000% BS. If you equip a 455 Buick and a 455 Olds with the same head flow and cam specs, they will make the same power and torque at the same RPMs desipte the Olds being a huge stroke and tiny bore and the Buick being the opposite. The nice thing about the Buick is that you at least have the option to make it rev with all that bore space to add flow. With the Olds you don't.
Where you really get into piston acceleration is not with bore/stroke ratio, it is with rod/stroke ratio. It doesn't matter what size the bore is, the piston will accelerate the same with a given stroke/rod ratio. A short rod will have long piston dwells and high rates of acceleration and side loading. Long piston dwells can be great for torque production, but hell on piston pins and bores/skirts.
Torque peak RPM is decided by the combination of parts, and it doesn't matter what you do to bore and stroke, the decision is made by displacement. Long strokes don't make torque, cylinder pressure and when in happens in the angle of the stroke makes torque. Sure, you can take a Chevy 302 with 400 hp and shift at 7000, but a 400 hp Caddy 500 will do the same 400 hp and shift at 4500 and make 500 lb-ft at 2000 rpms. That 302 will look cute in the rear view mirror.
TL,DR: Displacement is king, but that doesn't mean that a 305 has 87% the potential of the 350, nor does it have the same potential as a Ford 302 because of the 305's tiny bores.
If you're building something that just needs to start, run, and move a car, a 305 is fine. If you ever plan on even a tiny warm-up and more power, don't spend a dime on the 305. Just get one of the larger bore engines.