Now im not so great with cars... are they sayin this car can actually go 257 if it had the room? Or is that just a race term?
No, that was a link to a different story about a different car. A highly modified 1200hp+ Ford GT by Hennessy that set a new standing mile speed record at 257mph. A standing mile is just driving a mile in a straight line from a stop, and seeing how fast you are at the 1 mile speed trap.
With the aerodynamics of a Mustang (or lack thereof), I doubt even a 1000hp would get it much past 200mph, but mind you 35mph is enough to kill you.