Re: Better gas mileage w/ a 283, 305, or 350 w/ 700R4
While you're collecting opinions,
Since "performance" isn't a driving factor here, I'd think torque is the major consideration. As such I like the 305/EFI combo to go along with your TH700 tranny.
My reasoning is the 305 has more torque at lower RPMs than either the 283, 307, or 327 and less volume to try to fill with air and fuel for every revolution while still delivering enough horsepower to get you up a hill or two without needing to downshift. (Not that a 350 wont, it's just that if the smaller engine will, so why go bigger)
If you don't want the EFI "challenges", then a small Q-jet atop a "performer" manifold would IMO be the better induction choice. HEI at a minimum (and an MSD box if resources allow to promote complete combustion).
If you're planning to build the 305 yourself, then I'd choose pistons and cyl heads that'll work together to minimize any tendency to detonate on 87 Octane, and a cam with a wider LSA. 1.94 intakes are plenty big but I'd shy away from the 1.5 exhausts. The roller cam path you want allows you more airflow potential through the head while minimizing overlap. Regarding detonation, It'd be a bummer if you built this engine to save money and then had to pay 20 or 30 cents more per gallon for high test to stop the pinging.
Even without EFI I'm a strong advocate for putting an O2 sensor in the exhaust to watch what the A/F ratio is doing while driving. That'll enable you to jet the carb for optimal fuel mileage when cruising.
For a low RPM engine, I'd save my $ on balancing and spend it on a wide band O2 sensor and gauge, or a towing/RV style torque converter to minimize slippage until you reach lockup speed.
One final thought...Depending on the R&P ratio you have, with the TH700's 30% overdrive you can get too low on your Final Drive Ratio. If the street tires are normal diameter, I'd think 3.08's are about as steep as you'd want to go (thinking alternator and A/C RPMs here and potentially falling below the engine's natural torque curve). I like 3.55's behind a TH700 personally. You say it's a daily driver project. But you'll still need it to take off from a traffic light a little quicker than a city bus. So depending on the weight of the car, shoot for at least a 9.0 or better total mechanical ratio in low gear.
Just more food for thought.