Well, I sympathze with your situation. I used to go to breaker yards to get wheel cylinders to keep my car running (or stopping). Thankfully, I can afford to buy new brake parts these days.
I think your repair idea will seal the hole. You just need to be sure that the bolts won't come apart. Loose metal bits inside an oil pan are a really Bad Thing. Had an oil pump spit out one of the gear axles after an engine rebuild and take out the block wall (Note to self: always replace the oil pump when doing a rebuild) If you use Locktite 609 studlocker, they won't ever come apart without heating. Clean the bolts and nuts thouroughly with brake cleaner, let dry, apply the Locktite and then torque tight. After 15 minutes forget about them coming apart. Make sure there'* clearance from the crank before you do that! You may want to use some gasket sealer around the bolts or you'll get a little oil leakage.
Oh yeah, I haven't rebuilt one of these engines, but some engines use one use bolts on the bearing caps. When you torque them up to spec, they stretch the right amount to lock in place. You may need to replace any bearing cap bolts you've removed. If you reuse a bolt that is not supposed to be reused, retorqueing it will further stretch and weaken it and it might break on you when the engine runs. That'* bad, by the way.. If you can reuse them, I'd use one of the Locktite products (NOT 609) on reassembly.
I've rebuilt small engines that have thrown rods. It'* amazing how much damage can be done when a rod grenades. There'* a very real possibliity that there are minute impact cracks in the block that will open up once it runs. There'* also a possibility that some metal bits got sucked up by the oil pump. That'* also a Bad Thing. Change the filter. After you run it for a few minutes, change the oil and filter again. Pray.
Getting a crank ground and a new set of bearings will cost you about what a used engine would. It'* wasted money if you dont strip the block down and hot tank it before reassembly.
We don't think about it much, but the tolerances and clearances for an engine to run reliably (or at all) at up to 6K rmp are mind boggling. I do a lot of machine work and regularly work to .001 tolerances. A lot of engine parts need to fit within a few thousandths or better. Doesn't take much to screw that up.
I really think you should make a bunch of calls to your local breaker yards and explain your situation. You want to talk to the manager if possible. You may well find somebody who will give you an engine for little or nothing. A lot of people will do a good deed if it doesn't cost them too much (and some won't if it costs them a penny, but that'* life) You got three offers of blocks from guys on this board already, so there'* hope
Got stuck in St Louis years ago when a bolt a stupid PO had dropped down a carbeurator finally pinged around and got stuck in an intake valve. No moeny. Crashed at my sister'* place, pulled the head and ended up in a shop in East St Louis. Area gave me the creeps in broad daylight, but the guys in the shop took pity on me and had the head fixed up the next day for very little $$$. Got the car back together and got home. Engine ran for quite a while after that too. Never can tell when you'll run into really nice people.