I'd think you'd be lucky to hit 110hp. Around 105-110hp in stock form. Maybe they made more but not by much.
As far as the chassis goes, various ways. Best and most cost effective would be to ride her stock until you can upgrade and put all your money into something newer.
However, if you are stuck on making this thing run...
New rear suspension, doesn't matter what, buy any '03+ Polaris, Cat, Ski-Doo suspension and track. You'll be in love.
Skis are definately needing an upgrade if stock.
Drop and Roll is a nice mod but takes quite a bit. New tunnel might be worthwhile if it's an option for you. Nothing fancy, just a stock tunnel off of soemthing newer.
Seat and steering is also needed. Get rid of the stock seat and fuel tank and swap for something again, more contemporary. Way higher steering post and handlebars will make a world of difference.
Newer plastics also help with going through the deep snow and keep that machine from plowing like they used to. S-Schassis plastics bolt right up. ZX plastics will work but shock towers are higher, if you build a couple brackets you could swap for a set of ZX front shocks and bring the front end up to meet the rear.
But in all actuality,
Compression test, complete overhaul of clutches, new chain and gears(gonna wanna gear it down if stock) Check jackshaft/driveshaft bearings. Steering joints and bushings. Then I'd swap a tunnel/rear skid/track/skis at the same time. Seat/tank/steering would be second phase. Then plastics and front shocks would finish the sled off at that point. Then a total refresh of the motor to make it dependable. Install UFO's in the carbs and prolly remove the airbox and run pods to clean up the engine compartment. Ceramic coat the stock pipe(unless you can find a set of Jaws or Fast twins.) swap cans for something lighter.
As you can see, the possibilities are endless but focus on reliablility and durability on a sled 15 years old. Don't want to add power just to have a bearing give or chain break when you finally get out there to have some fun.