Hey CobraIIboy,
I'm new to the site like you, but definitely not new to II's. I'm working on a '78 right now myself. To answer a few of your questions... the stock rear is the 8" and can handle a reasonable amount of power from a mild build. If you have the limited slip, even better. If you're looking to build huge power (throw on a blower, etc.) then you'd probably want to swap in a 9" (which requires custom fabrication, etc.) With our cars over 35 years old now, it's possible things have already been upgraded. You can tell if you have the 8" if it has a plain back-side without a bolt-on cover and a bunch of bolts on the front around the carrier assembly. Stock 8" would also have come with 4-lug axles while the 9" would usually have 5, but 5-lug conversions can be done to the 8" as well so it's best to check the differential itself.
If it's an automatic behind the 8-cylinder, it's most likely the C4 with small bellhousing. The stock C4 can also hold up to mild upgrades without issues. They can be rebuilt to handle huge power as well and a good shift-kit can have you banging shifts with the best of 'em.
On the suspension side, probably the best thing you could do would be to get some nice subframe connectors (search for Stumpy's, available at a very reasonable cost and relatively simple to install). Some wider rims & tires will also greatly help, check the sticky for guidance on what might fit. I've put some late-model Mustang 17" wheels on mine using P245-45ZR17's and some 2" 2-piece 4-to-5 lug adapters. Otherwise just making sure all the stock components are in good shape is a good start (all the bushings, tie-rods, ball-joints, springs, shocks). Tubular a-arms are available and make for a nice upgrade as well. Don't forget to address the brakes -- the tiny front rotors and old-school calipers could definitely stand to be upgraded especially if you get some larger wheels.
