I have a 1983 mustang 5.0 hatchback.?
The atual size difference between a 350 and a 302 is miniscule... it will FIT, however it won't bolt right in.
Guys put small block chevs into the Fbody mustangs all the time for cheap drag applications, as sacrilegious as it is, but it is by no means a very easy swap. The engine mounts will have to be custom fabricated, not to mention whatever transmission you use may not match where the stock shifter location is on the mustang, and the mustang driveshaft will not mate up to most if any chevy transmissions so a custom modified driveshaft would probably be a must.
And I would hope you would go with a carburated 350, trying to match factory chevy fuel injected wiring to the factory ford wiring harness would be a nightmare!