You've gotten a better bike than you may realize. Right out of the gate, it looks like the RH headlight ear is straight and still wearing the original T/S stalk assembly. If the LH ear is as straight, the set is probably worth about what you paid for the bike...these are "unobtainium" rare parts. If the handlebars & original switch controls are at least restorable, you may have the equivalent of a $500-1000 winning lottery ticket. This is beyond where I'd want to begin the conversation but, I did read the term "money pit". When a bike can be restored back to original, there's a good chance that it will be worth as much, or more than, one has invested into it
1977 is an unusual model in some ways. Honda was well along in their cost-cutting and had largely de-chromed the CT70. That's huge, chrome plating is now painfully expensive. A pair of fenders, handlebars, top tree and engine guard might cost around $750 to have rechromed, all-in. It's a pile of bucks...still less than half of what it costs to redo all the chrome on a K1-76 model. Chrome parts can be done pretty much whenever you like. `77 handlebars are different than K0-early K3 but, the commonly-available repops will interchange (without the switch units), $125/pair...again, less than half the cost of rechroming. If you're just building a nice rider, the original bars (along with any other restorable original parts) can be "mothballed".
That solid color paint is a DIYer blessing. Get the framest parts glass bead-blasted, then rattlecan them, using basecoat/clearcoat. It's all in the prep work. As long as your prep is good and paint application reasonably so, good results are more than just possible...a stunning repaint for maybe $200, if you do everything but the media blasting. This also applies to the satin black parts (TL bracket, brake pedal, plug guard, rear signal stalk, etc), a.k.a. "rattlecan chrome"....$10 worth of paint + bead blasting and you're done.
Looks like the original seat can be redone. The later seat pans were better built and rarely break. The Later models also got far less perishable foam. Repaint the seat pan, install a new cover and you've got a restored original seat for less than the cost of an inexpensive repop.
Parts & machine work (head rebuild w/valve job, cylinder overbore +honing) needed to do a proper engine rebuild usually come in around the $400 mark. A 52mm bore-up kit (88cc) can be used for about the same cost as an overbore of the original cylinder. Figure another $45 for a master carb rebuild kit.
A fork rebuild for this model, costs less than $30 for 2 new seals and a quart of fork oil. By 77, the lower fork legs were painted silver...though you could metalfinish & polish them. Restoring the wheel & brake assemblies doesn't require much in the way of parts...it's mostly labor, as with most of the rolling chassis & engine assemblies. The more you can do, the less cash you have to spend. Going mostly DIY, you could shave anywhere from $500-2000 off the figures mentioned above.
There are 4 basic cost centers with a resto: body/paint, chrome, engine rebuild, "misc/everything else". Putting this into perspective, for your project, a "typical" K0-K3" model will take $800-1200 for body & paint, up to $2K for chrome, $750-1000 for the engine rebuild and $500-1000 for "misc"...that's farming-out everything. As you can see, going DIY-heavy, you should be able to get the rolling chassis beautifully restored for less than $1500, possibly a lot less. Skilled labor is expensive. But, an inspired amateur/hobbyist willing to invest time & effort can build a lot of "sweat equity"....without getting anywhere near a "money pit" of a project.
There are a few parts that have gotten a bit pricey. The original muffler for example.
As for fitting 190cc of Chinese engine...bad idea, especially for a beginner. A 140cc lump will make enough power to overbalance the suspension, brakes and tires...not to mention rider capabilities...and last a lot longer.
The stock fork, of this model, can be oil-tuned to perform better than the cheap Chinese stuff. Add a good pair of aftermarket shocks, new brakes, tires & bearings and you've got just enough rolling chassis to contain up to about 60mph. Above that speed, for anything more than a short Banzai blast, over smooth pavement, is risky. Just sourcing tires rated higher than "J"/62mph is a challenge.