Lancer, Some of those questions are best answered by your machine shop. As far as vatting the block, heads, etc, you'll have to do that to get everything clean enough to check tolerances.
Do you plan to rebuild the engine yourself or will you hire it done? Regardless, you'll know if the block needs to be bored after you mic the cylinders. Chances are good it'll need some amount of overbore unless it's recently been done. I never cut corners on an engine that I have no previous personal knowledge of. Everything gets checked, magnafluxed, mic'd, replaced or reconditioned to spec. Spend the extra money and find a machine shop that can pressure check your heads and block. Don't skip that part, it's money well wasted.
Your machine shop can tell you if you need to deck the block or mill the heads. Just remember that too much compression creates detonation. And detonation eats engines. If you do deck or mill you'll need to cut the intake as well so it'll seal against the heads. You're changing height when you're milling and decking which will also have affect on valve train items depending on how much you mill or deck.
It seems like a nightmare but find yourself a good machine shop that knows something about pontiac engines and then share with them your horsepower goal and budget. What kind of budget are you on? You may need to rebuild small now but keep in mind bolt on stuff for down the road as money surfaces.