Personally, I love the manual in my V8 and I love the automatic on my 4cyl street/strip toy.
This is funny because I'm just the opposite. I have my auto for consistency and my 4 cyl DD is a manual.
Ayway, To your post. I agree there's alot of great pov's here. I'll throw in a few random thoughts.
Bottom line, you have to decide your priorities. If it's financial, your Return on Invenstment from a practical pov (which is ironic in a Mustang modding thread) is to keep your car, hands down. All the money you could be putting into your car would be going into the other car payment.
If it's power, I've never seen an NA 281 hit 400 rwhp (but I won't argue it can be done with someone who's clearly more experienced than me) so a blower is your best bet. This is NOT all inclusive and you will not only have additional costs, you will have to remove some of the mods you already own. Also, I wouldn't even consider running a blower without the sub frame connectors on first and a tune.
Curious as to why you're set on 400 hp. If you get a blower, you pretty much have to spend a big chunk at one time and you'll still need additional mods to get you there. My '02 auto with the blower alone netted me 325 rwhp and 335 rwtq. If you stay NA, you can build at a slower pace, but I still can't see ever hitting 400 rwhp. If it's ET's you want, plenty of guys hit 12's with NA 250+ cars. They put as much effort into weight transfer and weight reduction as they do power.
Manual v Auto is Just a matter of preference. Both have positives and negatives. My auto has a higher parasitic value and weighs more. It's also more consistent and I've won more than one race from the other guy missing a gear. Still, IMO, a manual is alot more fun. As for cost, I don't have alot of experience with this, but I do have a friend that hated his auto and because he did his own work, was able to do the entire swap for nothing because he got more for his auto tranny than the cost of the parts.
Bottom line. Very few people are fortunate enough to NOT have a car payment. You are one better because you already have a great car that's owned outright AND modded.