My project, similar to yours, stems from CC's idea of the +2 being able to take a young family 1000 miles in comfort. I am following this, but using modern parts available to me. Now, a Zetec engine might/would be better, but (and please do not tell the purist police this...) I fancied keeping a large presence of the twin cam!
Rohan is better placed to tell you the way forward, but as everything I know is from him, and as it is my idea, I will give you the bones and he can finish with the finer points
You say that you do not want to end up with a 1700 and decking the block. I am with you on not having to deck the block, but what is wrong with having 1700? Nothing like a few extra ccs for easy power and it is easy to do with a crossflow: standard Xflow 1600 711M block, standard Xflow crankshaft and then make up the rods and pistons to suit. After half crank throw, you have 169+mm to fill the bore. Use a 122.58 rod, you will need a 46.9 CH piston, a 125.17 rod needs a 44.31CH and a 133 rod 36.64CH
At this stage, I urge you to read up on two things - bore/stroke ratio and rod/piston ratio. I will say no more, but fascinating stuff and after you will see why an 83.5mm bore and 133mm (5.23") conrod fit perfectly. It maybe shows too how Messrs Costin and Duckworth were ahead of their time in the BDA design. Escort and Cortina enthusiasts are recognising this as an inexpensive way to get some more power and, they tell me, better tractability due to the longer rod changing the torque curve...The brilliance of this combination that you only need 39mm CH pistons, of which there are several, and by skimming approx 3mm from them, the block is nicely filled without decking. Nothing in this creates a truck engine.
As for breathing, I have not a clue what to suggest is best. I have stretched my budget and maybe mistakenly gone for a John Wilcox head - 1.6 and 1.4 valves, ported 45mm with throats widened and polished to 33mm and fast-road cams. Rohan has tactfully remained quiet on this, but a local engineer - one of the few 'Mr Cosworths' in France - sucked his breath in saying that at low revs, the engine might demand my foot be heavier on the right pedal...! His thoughts are that the throats should only have been enlarged to 30mm... We will see! If you see a near new Wilcox head for sale next year, you will know!
How far are you? Do you have a Xflow block and crankshaft?
Lets keep in touch as it seems we are looking for the same result.