An 85 Automatic would probably have a 727 tranny, they are great transmissions to my knowledge, I've worked a couple 2ws versions behind a 318 and never had any issues. As far as a daily driver, the 360 is known to be hard on fuel over the 318, so it really depends on how you want to use it and how far you are driving it.
My current build is a 86' w150. My plan was a 318 4bbl with a 465 Manual and a high ratio gear set with manual locking hubs. We just pulled the motor I intended to use today and discovered its a 360 not a 318. I'm about to start a new thread to see if there is a reasonable 360 setup that will be more economical or if I should concentrate on pulling a 318 that I have in another truck.