question about converting 4 lug to 5 lug in the rear

I don't know what rear you have, but if that rear was offered with 5 lugs, you could just swap. This assumes that the axle length is the same. You would also need brake drums at the least.

Some rear ends have enough flange to redrill the lugs. This is done to add, subtract, or respace the lugs for different wheel patterns. The drum needs the same treatment.
Good luck
Dave
 
the stock 6 cylinder rear end in your mustang is pretty much an orphan now. the 7 1/4" rear hasent been used since like 1971. nobody makes parts for it anymore, and the axles cannot be modded to use a 5 bolt pattern as they dont have enough material in the flanges. grab an 8" rear from a 65-66 V8 mustang, any year maverick, or a 75-80 granada. they all will bolt to your springs with little or no problem, and they are not expensive. you can then get inexpensive disc brake kits for the 8" rear if you so choose.
 
the swap to an 8" is the way to go, however I don't see the point of going to disc's in the rear unless you intend to make a track car out of it. The rears don't do alot to stop the car in regular driving, the only real advantage is the disc's are better when hot from hard use. there are a lot better places to spend your money.