It doesn't matter how powerful your engine is, this sedan will not stay around the corners fast enough along with other smaller cars. You may reduce the overall weight to the minimum, but its chassis is too long for tight cornering.
In my opinion, I'd sell this sedan, get another shorter chassis car, and put the LS engine in it. This has been done in a '80 Toyota Corrolla hatchback SR5. I forgot the exact year of this Corrolla but it's in this forum. You'll find it if you search. Last but not least, if you'll think about turbocharging or supercharging, all the threads are in the Forced Induction section. As far as I know, the stock LS/SC engine has been run around around 400 whp or maybe a little more.