I would support the engine and replace that freeze plug. The engine does not have to come out. If you pull the engine mounts, you can jack the engine up about two inches. Mechanic needs a new mechanic. Pulling the engine on a 32 year old car can cause you a lot more trouble.
After replacing the freeeze plug, change all the fluids. Then put some miles on it and see what else needs to be addressed.
If your overall plan is to do an engine swap as suggested, then don't spend a minute on it until you have gathered all the parts and are ready to rip the entire drive train out.