Welcome to the site from a guy in your exact same spot. I have a 74 Road Runner that was a 318/904 car but had a 360/727 when I got a hold of it. Right now it's in the shop getting a 440 put into it.
I think the first thing you need to consider is money. If you really want a 440 in the car, then every nickle you drop into that 318 is one nickle less that you have for the 440, so be careful what you do with that 318. That said, 3/4ths of the cost of having my 440 rebuilt and installed is being covered by money made from selling the 360 and small block 727 that are coming out (I sold them to a guy who's putting them in a '66 Valiant). So if I were you, I would get the 318 fixed as cheaply as possible so you can sell it to offset your costs if you go for a 440. Also, you do not have to change the K member to go from a 318 to a 440. You just need different motor mounts.
To YY1's point, if you've got a blown head gasket, most likely you'll see coolant in the oil. This is easy to identify. While coolant and oil can somewhat mix when hot, they separate when cold. When your engine is cold, pull your dipstick and look at the oil. If it's 100% dark brown, you probably don't have a bad head gasket. If you see streaks of white or light brown on the stick, you do have coolant and water getting together somewhere.
All you have to do to check your freeze plugs is lay down where the coolant is leaking, and look up along the engine. If you see the water is coming from what looks like a round indent about two inches wide, that indent is a freeze plug, it's leaking, and you need to replace it. If it's coming out from the head, that would be a bad head gasket.