About mods for a 5.0
I own a 1979 mercury capri(it is lighter than a mustang) it came with an original 5.0 the first year of the fox body style, upgrades i have fould usefull over 20 years of ownership.
Go to carberation instead of fuel injection better throttle response.
I like 410 rear end
world class or b/w t5 trannies
high rise with hood mods for clearance i run a holly dual feed dp
I like the 351 H/O (you can find them in full size mid 80 bronco 240 hp stock)change the oil pan to double hump.you can easily bring this up to 325 hp on the motor with a tight budget.
add single stage nos 125 hp
brace the frame (unibody)in the rear. this will help you launch straight.
And you are ready to run the lights
with the right tires you should see the mid to high 10's in a quarter
and you should be able to achieve it for under 10k