Personal POV : beautiful frame I dont wana harm it in any way and put a geniune engine it it and bring back the 2s Glory.
For Hid: not a big gun in this regard i always go tp denter (besharmon ki tran) to get the job done... but age apnay plan ker liya hai panga lenay ka tu I think a stand Up Head Engine like CG/GS will fit in tightly (Very Tightly) and you may have to grind uper side or move the uper pipe more up by bending or gas heating and bending to make room for it
Horizontal engine kay baray men kiya khayl hai wo bhi double craddle frame men baray aram say ajatay hain and these days you can hunt down upto 250cc in those ...