E30 engine swap?

Hi, my E30 is a 1990 320i SE in excellent condition for its age, has 135k miles, and I intend to keep it for many years, all being well.
Whilst the engine is fine, it does have a few minor issues, such as weeping oil seals and sump gasket and some coolant seep from various junctions. It could also do with new rubber hoses all round, a new timing belt and tappets adjusting etc, and generally needs attention. The gearbox needs the linkage bushings renewed. With this in mind, and the fact that I fancy a project, I have wondered about acquiring an M20 B25 motor and gearbox, stripping and rebuilding it in the garage, and then swapping it into the car. The end result would be an 'almost like new' engine with no leaks or rattles, and I wouldn't say no to the extra HP from the 325i unit.
So really the questions are; what work would be recommended in order to rebuild an M20 to 'nearly like new' condition: main bearings, valve guides, piston rings, injectors, gaskets, seals? And secondly, what needs to change on a 320i to convert it properly to a 325i? Engine, box, diff, ecu, instrument panel chip? What about the OBC (I have the full 13 button computer with fuel consumption etc)?
I'm aware that there are more adventurous conversions possible, eg to an M52 etc, but I'd like to keep everything original E30.
Does anyone have any thoughts or experience on the 320-325 conversion, or of rebuilding the engine completely?
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