Don't cut anything until you have all the weight on it that is going to be on it and it sits for a while. You can not judge the final ride height without the full weight. And the springs will "settle" during the first couple of weeks.
And yes, the stock Mustang II used the shocks as compression bump stops. They had a metal cup and a larger lower bushing. I think the idea is that hot rodders will probably be more careful on bumpy roads than the average driver Ford had to design for.