What can a 7 1/4 rear take???

I'll start of by saying - I don't know anything about the smaller diff but I used to do a fair bit of drag racing with other brand cars with small diffs.
If you want the little diff and want it to last - AUTO trans, just be easy with the shift kit, if you have decent power/torque you may want to think about heat treating your axels & gears (did this with my R100 Rotary back in the 80's - it works). The reliability is all in your right foot, push it hard and you may be pushing your luck also. Sometimes it's cheaper to swollow your pride a little, spend the $$$ on a stronger setup and then have the knowledge that your going to be driving home, not paying someone to bring it home for you....then you still have to fix it. IMO