All it takes is jetting, pipe and early Gixxer cams. But, go ahead and get a 1200, contrary to popular belief, it is not twice the motor per se. But, say in a drag race, yes the 1200 will go faster...but the bottom end/torque off the bigger motor makes it feel easier to drive. As already noted it is the same engine size(outside) so it is not physically bigger. Just ride one before you pass it up. Cb550's are cool, till you ride a Cb750 then go..uh wow...you get used to/expexcting the thrust of the bigger motor.
Bandits are cool, I have been looking for one to make look like an old (85-91) Gixxer with the big bubble farings and double headlights....
Another thing to consider would be some track time/school for you riding abilities...sometimes money spent on school will allow you to be 'faster' than the 'latest high-zoot' XYZ-RR...
Post pic if you get one!