Help me understand rebuild vs crate?

Some of your price estimates seem a bit high. It all comes down to how mild to wild you want your engine. You can get a master rebuild kit for around $400 + $300 for your cam and lifter package. Engine machine around $800 Maybe $500 for a stock valve job on your original heads. Add 500 for incidentals and you have a good running engine with mild cam for $2500. If you are shrewd and shop around you may be able to get that motor for less than $2000. Starting with a stock 360 block would give you more power and displacement for the same price. Now if you are chasing horsepower the Blueprint crate engine is hard to beet but for a mostly stock 318 car you can build it pretty cheap with good results.

You want your engine to be cheap, reliable and fast. You can only pick 2 of those though.