If you want to keep it looking original, then it would be fine, but it's still a babbit pounder.
It would be better to go with a 56-62 version because they are full pressure, and have insert bearings and do not require shimming. You might need to shorten the water pump or adapt the earlier style pump for your application.
The best would be to find a 59-63 261 which is going to be full flow as well as full pressure. 54-58 261's are not full flow.
And then there are the guys that will tell you to put a GMC in it. You might want to think about upgrading the rest of the driveline if you go this route...
