what cam to buy

Calling a cam manufacturer and giving them your cars weight, gear, trans, info, block, heads, compression ratio, valve relief c.c. ,final gear ratio, tire height, and a slew of other things that will give you an accurate answer.

stage 1/2? what are those?

It all depends on what you want to do, obviously a custom is going to be the ideal decision based on performance but it doesn't sound like you care about spending $300 for something all out.

Cheapest way would be to find a used TFS stage 1
A xe274hr would probably want a little more gear but in a stick with a lighter than foxbody car, it would probably put down close to 300rwhp when all said and done.

So there are other options out there, it just depends on your budget and what you want to do with it.

that is a pretty mustang. As far as the stage 2 cam goes some guys have gotten away with using it others have not without notching pistons. The stage 1 will work nicely for sure.