This is a going to be a learning experience for you. Your main constriction is the money. You can MAYBE buy all the parts to make a proper conversion to a V8 since upgrading the suspension, brakes and cooling is also required but you will need to do ALL the work yourself since you have no more money.
Being "i dont know that much about cars", this may be a stretch for you.
You can also visit Clifford and get some go-fast parts for your car and you can afford the help of a mechanic to put it on for you. And it will be a more unique ride than every one else. http://www.cliffordperformance.net/
a 302 is your best option but theirs some suspension upgrades you have yo make and use a different transmission but you can make that little 200 run pretty good but a header on it and i don't remember who makes them but theirs after market cams available for them i had a 66 ford rancharo with the 200 and it just had a header and i was really amazed how good it ran still not a power house but still not bad and i was still getting 23mpg
One here suggested to "drop in a 302". It isn't as simple as that. It requires a change in the suspension and many other components. I suggest either use the money to restore items on the car or if you want a V8 car, sell yours and get one that is already equipped with one. As far as technical help, get in touch with a local Mustang club. There are many all across the country. Members would be quite willing to help you.
I agree with Ford man that you would be better to spend the money on rebuidling engine and restoring car. Being thaty ou are limited in funds and don't mention that you have friends that are knowledgeable to help you will be paying a lot for labor just to install. that is just my take on it. http://mustangmustle.blogspot.com/