Hi Dave, good choice on buying an Escort!
Yes the Kent motor is lighter than the Pinto, however it takes some work to get it up to the power and more importantly torque that the Pinto does. You would be better off spending that money on the Pinto and getting even more power and torque. And torque is the key to going fast on a budget!!
Registration wise you won't have any trouble as the mk2 was released with a 2ltr anyway.
So the pinto i think would be your best bet. With your budget of 5k, id be spending money on suspension (new poly bushes throughout, uprated sway bar, springs and shocks). Id probably then just make sure your driving position is good, so a decent seat and steering wheel if even needed (you don't need to spend a fortune here). Good brake pads are a must as are decent tyres if the ones on it are not that crash hot..
Then pretty much spend the rest on the engine. A good tuned down draught webber, extractors and even a fast road cam. Perhaps a better clutch while your there.. Finally make sure you get someone to give it a good tune!
Parts don't have to be brand new either.. many of us have a heap of gear we're willing to sell/swap etc.. Search and you'll find some good stuff for little moneys!
And finally.. be sure to post a pic of the new steed!!