You're on the right track by cleaning everything first. This includes the connectors in the wiring harnes. A bore cleaning brush for a .177 caliber works good for the female bullet connectors in the harness. I would do a compression check before teardown of the engine. If compression numbers are even in all four cylinders then I would put the bike back together and focus on everything else needed to make it a reliable daily driver, such as:
*Tires
*Chain/Sprockets
*Brakes
*ELectrical, which includes chasing the gremlins out that proliferate at corroded/loose connections
*If you take the engine out I would suggest valve seals along with the "coin" seals underneath the cam towers that seal the head stud pockets.
*New seals at the output shaft (front sprocket), shift shaft seal, kick shaft seal, tach cable drive seal
*Check forum member "Hondaman" posts for oil flow mod to the clutch hub and for o-ring replacement at the oil pump and transmission bearing.
I would leave the "Bore and build" of the engine for a future project. Funds are quickly exhausted when building an engine. If it ran good and compression numbers are even then I would continue to run the engine with the maintenance described above. I've got 60,000 relatively trouble-free miles on my stock engine and others have gone much further. I am currently working on my own project "Evolution"
http://forums.sohc4.net/index.php?topic=100352.0 that will be a budget-concious build that will focus on reliability. These engines have plenty of power in stock trim so my project focus will be on the typically most neglected items (i.e. brakes, electrical, wheel bearings, oil seals, tires, suspension, and cosmetic) to make it a bike I would not hesitate to ride long haul. I'll splurge on the paint for the "tins" (tank and side covers) to top it off just because of the amount of effort required to do what I just desribed, and that doesn't even include tearing down the engine, which I consider to be a formidable undertaking in it's own right when done properly.
Good luck!