Moezy, Some of the answers to your questions are running in your other engine thread, right next door. If you discover that your current engine is toast, either overhaul it or find another and do a head gasket job before you raise it back up into the car. BUT, stick with a 94 STS engine so you don't get into different wiring connectors and engine management computer problems. The SLS engine is different.
Jakes stud kit will run you about $550 I think. Add gaskets and such. I think I heard the price quoted by someone at $700 - $800. If you don't do it, you may have to in the future. It's just good insurance.