A machine shop should know how much meat to take off it. They basically carve the center of it out. It will make a big difference to how the car revs (faster, but revs drop quicker too), take in your harmonic balancer with it as they will need to match the assembly.
Your harmonic balancer might be stuffed (all original zed ones deteriorate over the years). If it is stuffed you can destroy your bottom end bearings in the motor, so its worth fixing the old one or replacing it with an aftermarket one.
I noticed my engine was alot snappier when I changed the flywheel, it really revved quickly and the curved electronic distrbutor really made it a beast, can't wait to put a huge cam in it and triple mikuni's.
Depends on what you want honestly, the more I think about the L31 build the less I think its actually neccessary for a good L28. That is LD28 crank and overbore. You could take it out to 2.9ltr if you want.
For a budget build, I'd consider an L28 crank with L24 rods and shorter pistons (depends on CR ratio though). L24 rods are better as they are longer and the rod / crank ratio is better = better revving engine.
I would probably invest my money in port work for the E88 and pay special attention to the valve areas.
That's just my opinion though, I'm not an engine building expert.
What camshaft have you got in it?