Back to the transmission. As we all know, what you can fit in an early Mustang is only limited by how much time and money you want to put into it. They've had everything from modular motors to blown coyotes to Chrysler hemis and even big block chevs (which obviously should be a hanging offence) put in them, along with T56 6 speed gearboxes.
If you're set on the TKO, yes you have to cut the tunnel. If you can get a second hand one you'd want to sure about it's condition as a full rebuild could push the total cost past the price of new one. I would have thought you could do better than $2,500 for the rest of the gear you need. I don't know what clutch actuation arrangement you have with the T5 at present or if you're using the original top loader bellhousing with an adaptor but much of a cable or hydraulic setup should be able to be re-used and you can get an adaptor to bolt the TKO up the top loader bellhousing. You will need a bellhousing (or adaptor plate), a crossmember and various ancillary bits and pieces.
If you go with a TKO bellhousing I'd be getting that locally from Mal Wood, Dellow, CRS etc. as the shipping on a bulky item like that from the US will be steep. For the rest of the gear, I got the following last July for my T5 conversion from Modern Driveline delivered to my door for about $1,250 AUD. Prices for their TKO gear are pretty much the same. Dollar has weakened since then so it might be $1,400 or so now.
Hydraulic master and pedal linkage kit
Internal hydraulic slave
Crossmember
Trans mount
Hurst shifter, boot and knob
Pilot bearing
Speedo gear
Full nut and bolt kit to put it together
I guess you could consider just putting your new engine in and seeing how the T5 goes with your driving style. If it doesn't cope you haven't really lost anything but a bit of double handling. If it does, you're well ahead $ wise.