Too early in the AM....Your engine will be 5/8in. wider.....You realy need simplify...1699cc is not a monster engine....welding cylinders is very expensive, as castiron requires nickle welding material.....
welding up cylinder heads is also not cost effective.....cylinder base gaskets, and/or copper head gaskets are the way to go....
You stated you considered "a 1mm cylinder base shim, that's .060in"
That calculator is killing you....One inch equals 25.4 mm. 1mm equals 03937in.This means your .060in is closer to 1.5mm....
Sit back, relax, and state what you want this engine to do....
The cam, if a lower " performance" choice is not worth splitting the case for, unless you are shooting for an all out assault on MPG.
I run an Eagle cam of high lift and rather long duration, and still get 32 mpg, if I keep my foot out of it.
A compression ratio of 8 to 1 is reasonable for the typical life span of the engine. Alchol, gas, whatever.....
Remain Calm....we're here to help....
Leon C.