Help with choosing engine and frame ('70 C10)

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Hello, I bought a 1970 chevrolet c10 a year ago. It is a long wheel base with a 350 engine and automatic transmission with no power anything and drum brakes. It is not in working order so I would like to take it apart to build what I want the truck to be. I eventually plan to make it into a pro touring/daily driver, but for now I plan on making it into a daily driver for the spring and summer (so I would like to have updated suspension and power brakes/front disc brakes and power steering), that gets good gas mileage like 25 mpg for city driving and higher for highway(so engine has to be good on gas and I will try to save weight in some areas) and has enough power, and plan on shortening the frame to a short wheelbase version, and eventually want to put a 5 or 6 speed manual transmission into it. I do not plan on hauling heavy trailers or using it for other heavy duty purposes as I have another truck for those jobs. I just want this to be a daily driver that gets good mileage and has enough power to drive and overtake cars on the highway. I know it will be tough but I am up for the challenge.

So 1) I need to decide on whether to keep the existing frame and cut it shorter OR find a newer frame such as one from a used 1/4 or 1/2 ton chevy truck/suv (that already has newer suspension, power steering and brakes). So any thoughts on whether to keep and cut up the old frame and upgrade/update its suspension and braking components? Or find a newer used frame with newer suspension etc. and just shorten it? If I were to use a 1998 gmc jimmy suv frame would it be able to support a 1970 body on top of it?(I looked up the length and I would need to extend it for this application). Also would a newer frame be a lot heavier and not worth it if I am trying to save weight to increase mpg?

AND
2) I need an engine SMALLER than a 8 cylinder and 3.8 litres (and probably not going with a chevrolet engine as fuel efficiency is my biggest goal). So inline 6 and v6's come to my mind, but I do not know of any that would be fuel efficient enough to get 25 mpg city. So I started thinking of 4 cylinders. Chevrolet makes a 2.0L turbo 4 cylinder that makes 272 hp and 295 lb-ft torque. Would an engine like this be powerful enough to put in my truck? Or should I look for something like a 3.0 litre 4 cylinder engine something like a 2JZ or a RB24 (I really like these options but do not know what mpg they would achieve), etc?

Any help or advice would be helpful. I do not expect crazy good mpg, like plus 30, but am striving for 25 mpg for city driving as that is where I drive mostly.

Thanks again, and sorry for the long post!