I recommend doing your body installation before you do any engine swapping. Since the finished car will be lighter than the donor you started with, I think you will find that the performance of the car will improve significantly. Plus, the inline 6 engine revs very nicely like a sports car should, and with the right exhaust it sounds like it should, too.
However, if you get that far and decide that it's just not enough, having already done the body conversion will still be beneficial. Particularly with complete body kits, having the front end sheet metal out of your way makes the engine swap a lot easier. In the case of the Velo Rossa™, the one-piece bonnet is extremely easy to remove and get out of your way for engine work.
There is a lot of knowledge and there are a lot of differing opinions in the Z community in the area of engine work. Avail yourself of the information you can find at www.hybridz.org,www.zdriver.com, www.zcar.com, etc.
Engine upgrades can include anything from readily available headers and cams, to head swapping and complete engine rebuilds. Rebello has an excellent engine rebuild program. They are expensive, but numerous racing titles have proven their worth.
Engine swaps with other Datsun models are done frequently. One of the more straightforward is substituting a turbocharged engine for a normally aspirated model. The first and second generation Z engines are physically almost identical so a swap is not particulary challenging. Other Z enthusiasts have substituted extremely high performance four cylinder engines for both gain in power and reduction in weight. Third (1984-1989, single overhead cam) and fourth generation (1989-1996 dual overhead cam) Z V6 engines make good swaps. I have even seen Infinity aluminum V8 engines installed with very clean results.
The small-block Chevy is the most common engine swap for the Datsun. It fits very nicely in the engine bay, provides a tremendous increase in torque, and parts are readily available. It typically adds a small amount of weight to the car and requires attention to the fore-and-aft position to minimize disturbing the balance of the car by making it nose heavy. I recommend the Jags that Run book for the most complete information on doing this swap.
I personally like the look of the 4.3 Vortech V6. It’s the same bore and stroke a small-block, but lighter even than the Z engine. Very compact and good rearward position of center of mass.
There have been a few Z guys who have used the 3.8 liter, narrow angle V6 Buick Grand National turbo engine.
Small-block Ford engines have also been used. There are some advantages including a distributor position which allows the engine to sit farther aft in the engine bay, lighter weight, etc. However, Ford parts are typically a little more expensive and fewer of these swaps have been done. Therefore the knowledge base is not as strong as with the Chevy. Regardless of all that, there are a few diehard Ford guys who swear by that engine for transplanting into the Z.
I have also seen Mazda rotary engines installed in the Datsun. The Mazda is a strange little beast of a motor. It is available in turbocharged versions, revs very smoothly to high rpm, makes a wicked sound, and is extremely compact and light. Parts and knowledge are not as readily available as with some of the other engine swaps. However, with proper care and feeding (good oil and good gas) they last a LONG time. In the Mazda spec racing series engines can last several seasons without a rebuild.
Emissions restrictions are a sticky point on engine swaps. Requirements vary from location to location, however, the most restrictive is in California. In essense, the year of the car from which your engine was obtained will dictate the emissions standards you have to meet. Therefore, many engine swappers get older engines (pre-67 as I recall) from the wreckyards. However, you need to check requirements in your state and county before you do a swap. I strongly suggest that you review the extensive information to be found at www.HybridZ.com and in the Jags that Run V8 Z book that I sell.
I would strongly recommend AGAINST a Jag motor. There have been a lot of guys who've made a lot of money doing small block Chevy conversions on Jags. There are good reasons for that! 'Nuff said.