That looks like a great vehicle - full of original character and in great overall condition.
I have owned a SIII 109 for twenty years now, and I rebuilt it from scratch with a host of modifications to make it more capable and usable. It is a compromise between daily family vehicle and overlander, but could easily be re-rigged towards one or the other. I have an extensive website which not only covers the rebuild and mods, but also has tutorials on gear box, engine and overdrive overhauls.
Your overdrive photos show nothing of concern - they look pretty normal to me unless I missed something. The Fairey unit is not especially robust, but will cope admirably with the modest torque of a 2.25 petrol engine. Do not fit anything other than standard differential ratios (4.71:1; the aftermarket 4.75s should be OK, though), as taller ratios will leave the engine struggling on road as much as off it. A Roverdrive is a tougher and quieter unit and parts are easier to source, but unless your Fairey is irreparably damaged, there is no point in spending a small fortune on a replacement. Carrying the original transfer box input gear, shim and rear bearing housing is very good advice, though, even with a Roverdrive.
For the rear axle, definitely fit a Salisbury from a SIII and remeber to use the SIIIs shortened prop shaft. They're bomb-proof.
The 109 brakes are absolutely fine if well maintained. Discs have advantages, but also thousands of disadvantages ($). With an otherwise standard vehicle, standard brakes are more than capable of stopping the vehicle from its moderate speeds. The main difficulty with drum brakes is their need for periodic cleaning and adjustment, but that's it.
If you're content with the engine, then leave it. If the ignition system is in good order, they're very reliable and under-stressed, which is a big issue on vehicles used in remote areas; much better to have a steady plodder than a temperamental racer.
The wipers are a bit crap, but I fitted cut-down SilBlades and a Smartscreen intermittent wiper control unit and they
I have fitted a 200Tdi, three fuel tanks, a winch, twin batteries, better seating and a custom interior to add rear seats but also overland storage. Those, along with the engine rebuild and installation, overdrive fitting and so on are all detailed at
www.nickslandrover.co.uk . For what it's worth, I have been preparing for some time to fit Defender axles to improve steering lock, help with lateral stability (they're longer), up the gearing to suit the Tdi's greater performance and have disc brakes for reduced maintenance. The work on the axles is also on there.
Regarding tools and torque settings, I have only ever used imperial and metric tools - I have no Whitworth or AF tools, and have not run into problems. Old LRs were heavily engineered, to as Greenmeanie says, they are quite tolerant of incorrect torque settings, but having the correct settings will ensure much better longevity of the mechanical components by not overstressing them. Having a manual, even if it's just a Haynes manual, is very useful. Like Teri-Ann, I have seen sheared drive flange bolts and wheel studs, stripped transmission casing or thermostat hosing threads and other such maladies through the laziness and ineptitude of other owners and mechanics.