I agree on gears, and the comment about 373s for staying auto and 355s if possible T5 swap.
It really all comes down to how much and how far you want to go with it! I love my Foxes simply for the cost of modifications and the simplicity. There are very few jobs in my opinion that you could not tackle as long as you are mechanically inclined. There are so many resources available online to help you.
If you make your plan of attack and save... oh, and wait for sales/promo codes... you can modify very reasonably. I agree with everyone that it is a very beautiful unmolested 88, but you need to make her yours. My advice, don't go cheap! Use quality parts... it will end up costing you more if you have to redo things more than once. I know that I have changed my setup way too many times. I had fun doing it, but it cost me every time.
Think about what you want your car to look like and how you want to use it. If you want to cruise on road trips and pull decent MPG, don't change your gears. If you want to frequent the track but still daily drive, be careful of your mods so you don't loose you street ability (Camshaft).
Beautiful hatch! I am just now making time for my 88GT. I started with staggered 17" Cobra R's with 245 & 275 tires, H&R SS lowering springs, prothane isolators, hotchkis rear trailing arms (delete the quad shock for bigger tires), subframe conectors, **new shocks**, 373 gears w/ LSD and upgraded axles, four wheel disc brakes, with upgraded master cylinder, booster, and bias proportioning valve. Full 2.5" exhaust...must make her sound like a Fox!
I would deffinetly recommend starting with chassis,
suspension, and brake mods over engine mods. I am 27 and still feel as young and dumb as when I was 16 everytime I am banging gears in my Foxes.
Sorry for the long post, I am up late and rambling. Enjoy her and don't get her too sideways. It's much more fun to modify than repair everything you break being stupid!