The answer to your question is yes, you can overhaul the 650 top end with the engine in the frame.
And I would recommend that you replace the o-rings for the oil ways between the cylinder and the cylinder head, the rubber pad seals between the cylinder head and the rocker arm cover, and the o-ring gasket for the rocker arm cover as well.
One other thing, make sure you clean the area around the head for the two middle front cylinder bolts before you loosen them. Usually dirt will collect around the bolt heads and when you screw them out the dirt will fall into the threaded hole in the crankcase and you run the risk of stripping the threads.