Those choices aren't that great. I can understand your frustration. Giving up is not an option, so just put that out of your head.
My biggest concern with just leaving things the way they are is that there are probably other things that just aren't right. I know that draining coolant and buying gaskets is a pain, but doing it one more time would be worth it to get everything just right.
You've really only got two issues that aren't that hard to fix. First, the oil in the intake. Since you don't have that splash guard on the intake, I can only assume that you don't have that PCV filter screen, either. It's been a while, but I think the filter rests on that plate.
The next issue is the overheating. TFS TW heads may be different than Edelbrock (did Edelbrock have anything to say about the water passage issue) heads, but I doubt it. I'm sure these heads were designed to match up with late model blocks. Drilling a 3/16" hole shouldn't be that big of a deal. Cover everything with a plastic bag and have a big magnet to catch the iron shavings. The biggest problem is that you have to pull the heads to do it. Head gaskets aren't cheap, either.
Could the previous owner have already made this modification? What all did you get when you bought the car?
You may want to take your car and get the air/fuel ratio analyzed to make sure it's not running too lean.
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351W 89 Mustang GT Convertible