Hi dude. That sounds like a fun project, but dont get too wrapped up in keeping it stock, get a disc cutter to her and rip into it.
Na, just take your time and plan your build out so you dont have to do the big jobs twice. There'll be lots of ideas and opinions from the forum im sure.
For him it was down to money and ease really. He's a mechanic and for this project wanted quick results and was happy to get an engine that didnt require any work.
For cheaper than a 177 cylinder kit, I found my mate a Stella 150 motor with 200 k's on the clock. So that was a no brainer straight swap.
Im pretty sure he just put 10" wheels on it for the ease. It looks like what you think its going to look like. A killer paint job and slightly too larger wheels, but he dont care. And it rides well. You have to muck around with wiring but the loom came with the engine in this case, and he made a go of it. Its all doable.
1/2 decent running 150 engines are everywhere, new parts are so cheap and available, and on small wheels that's plenty of power. It also means you can either save your old motor and fettle away with it or sell it, and overall the whole thing can cost you less.
PX200 motors aren't cheap or necessarily available in decent condition, so something to bear in mind if looking at lump in a box. it does cost a bit more to rebuild than a Stella 150 motor too.
Just do whatever you feel like spending time and money on, the wheel size is a limiting factor.
With whatever choice you make, there is leeway. you can always sell the engine on if you're not happy with your choice and go from there.