There's a lot of wiggle-room for everybody to be 'right'. If you want to rebuild and modernize your MEL motor, do it. If you want to shoehorn a 460/C6 into place, do it. If you want a Coyote motor, do it. Ford is going to great lengths to produce turn-key EFI crate-motor Coyotes so that job would be easier than you might think. Our cars have Dana 53 rear axles, which are oddballs but gearsets are still available. A Coyote spinning 3.73s would move the car nicely. I've even seen an LS1 motor under the hood. What's 'right', is what's right for you.
I've spent a lot of time researching a 460 swap for my 64, and the short answer is this. If you're an experienced engine-swap kind of guy, it's not an especially difficult swap. Use the donor for everything from the water pump to the tailshaft. Like most swaps, you'll fab the motor mount rests and a driveshaft (no biggie). You'll need a specific Continental 460 front cover so you can keep the crank-mounted p/s pump. Solid-mount your steering box (forum member john brewer has handy kits for this) so you can run the exhaust real close and not have them collide.
I hope this helps, from one old mechanic to another, but I do take exception to your claim that a combustion chamber 'in the piston' is inefficient. The chamber is a theoretical, dynamic space, and one wall is always in the piston, and one wall is always in the head. The fuel doesn't know or care where it is. I'll also point out that nearly every diesel engine ever made, including the modern Cummins and Duramax pickup motors that can easily make 1,000 ft-lbs of torque and NO SMOKE, have the chambers 'in the piston'.