That all sounds like stuff than can be tweaked 
It looks a little rough under the bonnet going by the pics and I'm willing to bet the guy wants way more than it's worth. It will be interesting to see what it gets passed in at 
Maybe a post auction deal can be struck 
Yes, it can ALL be tweaked. There's nothing so easy to modify as the small block Chevy. Keep the original, and go get another, a 400 would be nice, but a 350 will do. From there, the sky (and your wallet) is the limit. I just built a pump gas 383 (stroked 350) that made 430HP and 450ft/lbs of torque. I'm working on the next one, it'll possibly hit 500HP. I've already built a 1/2 dozen 500HP+ 406 engines.
You can buy a package from Guldstrand to make that Corvette perform like a real sports car. It includes springs, shocks, sway bars, and bushings. All you need to go with it is wheel and tires.
You can swap an overdrive automatic into it fairly easily (700R4) and they can be built to take 500HP. That will allow you to swap in a 3.73 or 4.11 gear, but you'll likely have to buy a posi-traction carrier to fit the gear.
It's just money, and work. if you get a steal of a deal on the car, and don't mind the rest of the work and money, it'll make a real nice car. MOST people will assume it's just another "Disco Vette", and you can usually hand them their oscar easily.