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.

So the cost that I posted are from talking to Machine shops in my area and summit or equivalent for parts.

I had my 675 heads done a few months ago because they were the original leaded gas valves and were pretty much done. They cost $759 and change to be re-done. Hindsight, I would have never redone them.

Here are the Machining cost.
130 Hot tank
185 Bore and Hone
145 Square the deck
150 freeze plugs and cam bearings installed
230 to balance the rotating assembly
150 line bore if main bearing are bad

That is the lowest cost I could find and not the place I have used in the past that I know does a good job. Not always best to pick the cheapest.

Here is the other cost and links for a simple rebuild

Pistons Keith Black 167 https://www.summitracing.com/parts/uem-kb167ktm-020 $415
Lax heads https://www.indyheads.com/imagesmaxlaxnewproductlinK.pdf $1100 w/shipping
New ARP Head Studs for RHS heads - $75 ARP Individual Studs AR5.750-1LB
Comp cams magnum roller rocker https://www.summitracing.com/parts/cca-1622-16 $545
New Pushrods $100
Lunati 262 cam and lifter Lunati Voodoo Cam and Lifter Kits 10200702LK $210
Double roller chain Howards Cams Double Roller Billet Steel Timing Sets 94330 $100
Gaskets $150

That is where I got my costs.