Before you spend too much time on the 312, be sure to check for cracks in the mains and a straight cam tunnel. Problems with either of those and you're probably better off to find another block.
The G heads will give you more compression, which will help all around, power and efficiency ie mileage. With the bigger valves and better ports, they also give you more potential for future upgrades, say maybe a B intake and headers. Long term, the G heads are the better choice. Short term, the C heads do save you some money.
Everything else equal, wider centers tend to have a slightly smoother idle, better vacuum and a flatter torque curve. I think he did that to make it work ok with the stock converter as the E-4 is on the edge of what you can get away with.
If you put the groove in the block, then you simply use standard bearings, grooved or cross drilled versions. I'm pretty sure Ted makes it about 1/16" deep. Not sure about the width but he also installs restrictors just before the rocker shafts to prevent too much oil from bypassing the cam bearing.
A shop manual should have specs for the pump. All you really need is a straight edge and a good set of feeler gauges to check clearances. If they are good, re-assemble.
I don't know of any rebuild kit for the iron spur gear pumps but they are available complete, new from Melling.
Conversely, there are rebuild kits for the gerotor pumps but I don't know of any of those which are available new as complete assemblies. Melling also make this rebuild kit.
Lawrenceville, GA