Welcome to the 'Bolt, Lil' Billy!
Sounds like you've got an idea of what direction you want to go with it.
As long as the frame is in good condition, no rust through or damage, you shouldn't have to add any additional beefing for the big block. The 3200 used the came frame as the 3600 3/4 ton, so it is a little heavier than a standard 1/2 ton to begin with. Any additional strengthenig wil depend on what you plan for the suspension, like if you plan on converting to an independent front end, either by subbing it or a crossmember style. Then some boxing would be required. No real need for a new frame, as it's already got the best frame that fits correctly under it.
Traction is going to be an issue with any truck, although it is more controllable with the longer wheelbase than a 3100 would be. Even my own 3200 can get a little squirrelly in the rear, and I'm running a 235 6 cylinder. There are traction bar kits (similar to the off road trucks) available, and perhaps adding some weight in the back would help.
Normally, on trucks without the side mount spare, the tire will go under the bed, behind the axle. But most kits that move the tank place it in the same spot. So there's an issue there. Plus, if you take the spare off the fender, you'll need a different fender without the cutout. Personally, I'd leave the tank where it is, safest spot for it really, and place the tire under the bed.
As for trans choice, I'd suggest either the TH400, perhaps with a Gear Vendors overdrive, or a 4L80E. The reason I say go automatic is the traction issue. The autos have enough slip in the torque converter to keep cpntrol over the power to the wheels on take off.
