1. XR500 pistons were popular here in Australia in rally 4 cylinder engines back in the 80's. I knew a few guys that ran them, have no idea what they used for rods or how they made them work though.
2. Depends on the thickness of the piston crown for both options. Depending on your setup (valve sizes, cam lift, etc) you may need both. Ideally you'd mock it up and check valve to piston clearance. I run L28 flat tops in an L18 and would have had just enough clearance with a 72 degree cam, but I put valve reliefs in the pistons anyway in case I moved to a higher lift cam at any stage.
3. See point 2, depends on specs for piston
4. Should do
5. Ultrasonic tester is cheap from China. Mine set me back $60 or so, and they were Australian $$ so not many USD at all. Or strip it down and take it to a machine shop to get measured up. I'd do this first, before buying pistons (or anything really....). I've seen people say they needed to go thru a stack of blocks to find one that would go that big.
6. Can't see why it would be. Will .25mm be enough (depending on whether its a press fit pin or fully floating) to allow for any misalignment / movement. Of course, depends on the rod itself and how easy it would be to remove metal. I can have a look if you want, have a set of Maxpeeding FJ20 rods in the shed. Keep in mind for your budgeting that you'll almost certainly need to buy 2 sets of FJ20 rods, doubt you'll be able to buy just 2 to make a set of 6. Plus I'm not sure where you get FJ20 rods with 21mm small end ?
I still reckon its a lot of messing around for not a lot of benefit given your engine goals when L28 rods and flat tops would do the trick. I understand what you're trying to achieve, I love tinkering and messing round, just trying to be devil's advocate