I would check for codes and address those. The check engine light (CEL) only comes on for emissions related codes so there can be codes without the CEL illuminating. Get any leaks taken care of so valve covers, intake gaskets, exhaut gaskets, etc. Put a tune up on it so cap, rotor, plugs, plug wires, fuel filter, air filter, and check the timing (stock is 10 deg BTDC but you can run up to 14 deg BTDC). If it runs good there then let him drive it and get used to the car as is. Start piling up suspension parts as they are most likely shot so control arm bushings, dampers, new springs, and get some Maximum Motorsports caster/camber plates so you can get a good alignment on it. Drive it some more and let him get used to the handling. Pile up the parts to swap over to SN95 brakes as the stock Fox brakes suck so before you go fast you need to be sure you can stop it. Driver it some more and let him get used to that.
If the motor is healthy (compression test and leak down test will tell you this) then you have a couple of choices.
1) Heads, cam, and intakes or HCI. There is more to this as you will need to upgrade the fuel pump and depending on your choices you make also need to get bigger injectors. I would also suggest a 65 or 70mm throttle body and a minimum of a 70mm mass air meter (MAF). If you need bigger injectors I would not go much more than 30 lb/hr with a "calibrated" MAF.
2) Put a single turbo kit on it, get a tune, and move on down the road.
3) Put a super charge kit on it, get a tune, and move on down the road.
2) & 3) should come with all the parts needed to support the power level so read fuel pump, injectors, etc. You may have to do some exhaust work with the turbo so ask the vendor.
If you decide to go to a manual transmission you need to know what king of power you are going to devlop as a T5 is a great transmission but it has limits so do your research here. You could also opt for a built AOD.