The bellhousing and torque converter on the C4 have to be replaced with ones for a Windsor block. BUT, the '60s bellhousing and converter are undersized, so source a bellhousing and converter from the mid '70s on up for more fluid capacity. But it also may require you to modify the trans crossmember in order for the now-slightly-longer trans to bolt up correctly, and have the engine mounts correctly bolt up. If you do not have a C4 transmission, you have to replace the whole transmission, as no others except the FMX (and you *DO NOT* want the FMX) have bolted bellhousings.
It all depends on how you want to go at it. Correctly a lot should change mainly suspension wise. Mustangs have it documented pretty well if you look them up a lot is shared. The front wheel bearings are small on 6cyl cars vs the V8 cars, this was upgraded at factory as the weight overloads the wheel bearings. Requires a new knuckle and brakes to accomplish, now that's not to say others haven't done it without changing the front suspension. When you change the suspension that will make you buy new rolling stock as your now 5 lug vs the 4 lug 6 cyl stuff. Andy got you with the right trans setup. Basically you want the small set up meaning 157 tooth flexplate, don't forget the spacer plate and the small pattern torque converter. I think maverick stuff was a good source for this stuff. I don't remember the frame mounts for motor mounts but believe they change out as well. Then the weak link will be the rear and 4 lugs on the 6 cyl stuff. 8 inch rear will work for a 302 and more without the expense of going 9 inch. If you can source a 302 and trans together better yet. That's stuff to get you started on the project. Now if money is no object then there are many other things to do mustangII front suspension setup so you then have rack and pinion and the list goes on !!
Like Dyno says there are a lot of things to consider. Money, at least in my experience, is always the the limiting factor. I'm waiting for "my ship to come in" to put a TCP rack and pinion set-up on mine...I want it to drive, steer and handle like a modern car and I'm almost there. Too bad you are so far away because I would give the parts I take off (incl a roller idler arm) that only have about 2K miles on them...but that is still down the road...pun intended!
