Tammy, it's possible you need a different mechanic, or at least a second opinion.
Parts are not hard to find for the Rover. They made a zillion of 'em over more than 45 years now, and your nearest Rover dealer probably carries a fair number of parts in stock. Besides Rover, there's plenty of places to get Buick/Rover V8 parts.
How much power are you trying to make? Double stock? Triple? More? That makes a big difference in what you need to do.
If you want roughly double the power, somewhere around 200 hp, I'd go straight for the Buick/Rover V8. It'll be the fastest and easiest way there, and everything you need was already made for the TR8. I don't know if the TR7 and TR8 shared a rear end or if the TR8 had a different one, but I suspect the stock TR7 rear will be just fine with that kind of power, and 200 hp or so is going to be plenty of power in a TR7.
If you want a lot more power than that, then you need to go the SBC or SBF route. You'll probably need that Ford 9" rear, along with a different transmission, and a substantially reworked front suspension. I suspect you may not have a whole lot of TR7 left if you go that route. You're basically custom-building a hot rod that looks a bit like a TR7.
Either way, think about brakes. Stock TR7 brakes are nothing to write home about. TR8 brakes are considerably better. Remember you're going to want to turn and stop this thing.
I'm repeating myself, but my advice is to look long and hard at what Triumph did with the TR8, which was a very good little car. It was quick, it could turn, it could stop, and they already made all the parts for you -- you don't even have to figure it out, just call a vendor and tell them what you need.
As for your tires, if it were me I'd stick with the 4-bolts and move up to some lightweight 14" or 15" wheels. Probably 15"... tire selection is generally better.