Mark,
If you're going to put a cam and lifters in it I'd go ahead and rebuild the bottom end.
I have a cheap HF micrometer that's pretty darn accurate. A hair under 4" is a standard bore block. The pistons look stock as well. How is the cross hatch pattern?
Was there any indication that the heads have ever been off or the engine opened up before? Like RTV gasket sealer between the intake and the block?
What are the date codes on the heads? Have the valves been replaced with one piece Manley single groove valves?
The "welded" water passage looks interesting. Put a chisel, punch or screwdriver on it and whack it with a hammer. I bet it pops off or breaks up. I've never seen someone weld up a water passage like that. The passages in your pics make a good case for flushing the cooling system every couple of years.
Fel-pro makes good gaskets. The cast iron intake is actually pretty good.
Cam choice. In this world of aftermarket do dads maybe I'm alone on this advice but a Q-code cam grind (aftermarket available) is very nice street cam and has it's own unique lope sound. The Ford engineers knew what they were doing. Your cam choice looks fine though for an everyday street engine build. I did a cam wiki on here where all the known cams for our engines I could find were listed.
71-73 Cam Wiki
however, my best advice is to ask Chuck (c9zx) about your engine build and do whatever he says. When it comes to engines, Chuck is to engines like Qcodemach1 (Scott) is to body work. The 351C is a bit unique and many machine shops consider it an exotic engine and "may" not have the best advice. Another guy I HIGHLY recommend you research is George Pence. He's on the Pantera forum but is THE guru for 351C. Chuck and George are the 351C goto guys and both have SOLID advice.
Here's some VERY good stuff to read about 351C engine building from George:
http://pantera.infopop.cc/eve/forums/a/tpc/f/5650045562/m/5721023226
http://pantera.infopop.cc/eve/forums/a/tpc/f/5650045562/m/319104265
If you do the bottom end add ARP rod bolts and a new crank damper to your plan.