Lots of good ideas offered. Some of it may depend on what your budget is for the new car. A fun cruiser doesn't need everything listed to still be fun. IMO, the 96-98 Cobra has got good "bones" which can be improved to your taste. I have my PG 97 set up for fun cruising and spirited driving with...
Welcome! Check out Warhorse Racing's YT channel for a lot of information on setting up the fox chassis Mustangs for auto x.
How much did you pay for your new 97?