If you wanted to stay with the small block 'W' engines and had the choice between a 302/5.0 and a 351, hands down it would be the 351. Heads and camshafts are generally interchangeable, though not much else between the 221-302 family and the 351W though you do have a difference in firing order. A late 351(truck or PI) with the roller camshaft opens the door for reasonably priced SVT performance pieces, while using the iron GT40P heads that came on the Explorer and Excursion. If you want to stay carbed, Edelbrock Performer or Performer RPM intakes, an MSD or the Ford Duraspark work nicely. A C4 or AOD would probably work without floor/firewall mods, a C6 - they're BIG
Of course, as Tech said, the 4.6 would probably fit and be a great choice, but the '56 engine compartment and front frame are somewhat narrow in comparison to '57 and later so you might have to do some inner fender liner mods as well as floorboard to clear those big electronic controlled transmissions. Great option to consider though
If it already has a 'Y' block 272-312, they are also a very nice choice, look good and will run very well with a few up-to-date mods and mated to a later transmission.