When I did a 5.0L swap on my ’88 that had a 2.9L I got the same milage or maybe a little better.
I didn’t have to push the throttle down as much and in turn not burn as much gas.
Another 3.0 slow or a 4.0L would be OK but not improve anything.
The 302/5.0L with an auto would be easy but time consuming.
There are kits out there for all of the mounting and the wiring on a carb’d engine would be just a few wires.
Use a floor shift for the auto-trans and get a new drive shaft.
My ’88/5.0L had a 7.5 rear w/3.73s and it stood the test of time and a lot of power burn outs/smoke shows, I did burn out the posi but it was time for a locker anyway.
luck on your choice.
4x4, 5sp, Std Cab, Stepside, E4 Red
4” Lift - Coil-Overs, 6” SkyJacker Leafs - No Blocks (Mistake)
31 Spline FX4 Rear Axle, 4.56s and OX Locker, Hurst Shifter w/Optional Stick and "Made by Grev" alignment adapter