What to do with 454

Hi guys I've read around for a couple weeks now and the knowledge that is available here is astounding. This is going to sound like child's play to y'all but I don't know where else to go. I have inherited my father's 86 suburban with a 454 that's knocking - I'm thinkin bent rod. I would like to rebuild the 454 (only 88000 miles on it(or 188000 (or maybe 288000 lol))) and I know a lot of people would love to get their hands on one but it's much too inefficient (and only has a 3speed tranny). I was thinking about getting a reman 350 and swapping it or perhaps trading the 454 for a 350 and tranny.

If there was a way to get the 454 to run efficiently (or almost as efficiently as a 350), I would just stick with rebuilding that and getting a 4 speed tranny and perhaps change up the gear ratio and be done. If that's going to be too expensive, then I could trade the 454 for a 350 w/tranny, rebuild the 350 and drop those in. What should I do?!

tl;dr - I have a burban with a 454 that needs rebuilding and I want something relatively efficient. Options are swapping with a 350 or rebuilding the 454, getting a 4speed tranny for it, change gear ratio, new intake and exhaust, and anything that will get me better mileage.

p.s. - I've only got 2500 to spend total (I found a 454 rebuild kit for 400.00 and a brand new 4speed tranny for 700.00)

Mileage is not the 454's forte. Go for the 350, swap the big block to someone that tows a heavy trailer.

Ok cool I have a friend that I just made a deal with to trade my 454 and 3 speed tranny for his 350 and 4 speed tranny. Now I have a little more money to play with and a few more questions.
Mods:
Is the 350 going to drop right in or am I going to have to have the driveshaft modified? What should I do about the gear ratio?
Engine:
Should I get an aftermarket/performance intake? If so, what are some suggestions? Exhaust? There's nothing wrong with the current exhaust, should I mess with it at all - I don't completely understand how backpressure works and don't wanna mess it up.

I know I'm a newb with a lot of questions but I appreciate the help, guys!