Just making a quick introduction. Made my first 914 purchase just about two weeks ago now and now starting to dive into this car.
Its a 73 non-California car with the EB 1.7. 100k ish miles on it with a motor that is leaking like crazy (more on that later). Single 32/36 weber. Classic Auto Air AC unit. Fiberglass GT Flares, Empi Replica Fuchs, and a bunch of shit ripped out of the engine bay. Bout all i know on these

Next to my AE86 Track car that is currently getting a cage welded in

So now getting to the real stuff. I have worked on boxers before, i have an 400 HP ej22 on e85 in my Forester (that needs to get pulled, RIP transmission). But I have never worked on an air cooled one.
Right now, i have been doing some basic maintenance that i do when i get a car. Change all fluids, been changing all the hoses on the motor because they look like the original ones, added a catch can, etc....
But of course after changing the oil and pressure washing the bottom on the engine/trans. I notice this thing is pissing oil out the rear main. So i decided with the unknown state of the motor, im just going to do a rebuild.
Reading around its seems like the easiest thing is to buy a AApistons 19XX cc or 20XX cc kit. I dont have a horsepower goal in mind. I just want this rebuild and hopefully get close to the same mpgs i had with the 1.7 (30 mpgs on the highway driving between Phoenix and Tucson)
The end goal with this motor. I have an entire pertronix flamethrower vacuum dist with the correct coil and plugs. While the 32/36 works for now. I will replace them with 40 IDF webers. Then some new headers and exhaust. The horsepower I get is what I get. Not too big of a concern.
Q1: With my motor being a 1.7 i have to get the heads machined to fit the larger cylinders and some massaging of the combustion chambers to get the the compression down. Correct?
Q2: Cam choice. Do people run the original 1.7 cam or just get a "street/oem" grind from Web.
This was a long one but I look forward to what i can learn!