What kind of shape is the PCV system in?
As you've noted, N/A Whiteblock performance mods aren't that common, nor are they a very good return on investment. There's a handful of +T builds, but they fall squarely into the "why bother" category in my opinion.
Engine swaps aren't all that involved, basically any Whiteblock I5 from '93 to ~'07 (maybe later) will work, I'd stick with earlier engines, or be swapping heads to avoid VVT.
I've had a N/A 850 sedan for a long time, it is, what it is, a reliable, cheap, secondary appliance. I've done some suspension stuff, Eibachs and Konis, and it's got some engine mods. I've got an early VVIS equipped 2.4l I swapped in place of the original engine (long story), VVIS working, a 960 throttle blade, Turbo air filter box, and stainless eBay/CS Racing header. It's better than stock, but just.
I just recently put a set of Cooper CS5 Ultras on it, and bought a complete timing kit from FCP. I've essentially spent more in maintenance in just the tires and timing, than I could ever make back if I sold it.
I admittedly have some sentimental attachment to the car, and it does a great job of being there when we need it a few times a month, it's cheap to insure (liability) and long, long, long ago paid for, so it remains in our fleet.
I have occasional, delusional, day dreams of it someday becoming a T5-R clone, but there's at least a dozen equally delusional projects in the queue ahead of it.
If you've got the room to keep it in the fleet, they're great, cheap, back-up cars.