It won't take much to wake a 5.3 up. I think Car Craft took a little older one put a set of good header's and a mild cam with a Edelbrock intake(I think) and a 750 dp carb on it and made 90 hp over stock. If you are not going to balance the engine don't go crazy on the cam a lot of guys like to run LS6 cam's in thier trucks for good balance between driveabilty and power. Everyone makes intake's for them you just need one for a LS1. I can get good deals on gm performance part so if I can help let me know.
The 4l60e will live behind the power you're going to make, BUT not for long it needs to be beefed up. Any good tran's shop should be able to fix you up. One more thing heat is the number one enemy for a tranny, so a good cooler with a fan will help make it last. Good luck and let us know what you decide.