Welcome. I did a restoration on one of these some years ago for a customer, pretty neat old cars.

The original 365 engines were not really too bad for their day, not a real ball of fire but a pretty decent cruiser. As an alternative to an engine swap, you could try to find either a one of the dual quad or Tri-power setups that were available for them (kind of rare but I have occasionally seeen both on E Bay every once in a while). Send the valve covers and a few odds and ends off to be chromed and yhou have a nice resto rod.

If you have your heart set on an engine swap, IMO a 472/500 CI Caddy motor with a TH-400 would be the way to go. I'd leave everything pretty much stock on the engine but some of the Caddy sites can give you a preyy good idea on what mods will work well for what you want.

One of the keys to getting pretty decent gas milage with the big inch Caddys is to take advantage of the massive amount of torque with set of high rear end gears. The problem is as far as I know you aren't going to find many choices for your stocfk rear end, leaving you with only a couple of choices, either a rear end swap to a unit that more gear choices are available or an overdrive transmission.

While the transmission route does have a certain appeal (such as a 700R4) keep in mind it will have to be very well built to handle 500 foot pounds of torque in a very heavy car.

I'm sure others will have different opinions, but that;s mine, hope it helps.