I would also think if you let ecu and injectors lriginal you can goal arround 275hp what ist maximun what the gen2 original injectors can savely arrange.
If that is enough for you that is what you should do.
A gen3 swap can arrange savely arround 320hp (engine hp not wheel hp booth) without modifications on the engine.
But what you habe to do for booth in my opinion is to put an extra oil cooler in, also a wideband afr gauge. On gen2 its also a good thing to relocate the oil filter.
Then you need a 3" exhaust also as a 3" downpipe and decat or a 200cell kat in the frontpipe (also 3").
If its a normal st185 then you also need a fmic or wta tmic (from sainz or st205) because the original tmic is verry bad for more then stock boost.
These are the most important things what i think is a must have for more then stock boost on booth cars. The gen2 with stock injectors and stock ct26 turbo can savely boot arround 1bar (with metal head gasket with normal gen2 head gasket only save arround 0,8-0,9Bar) with gen3 engine and ct20b you can savely rund arround 1,2Bar.
Gen2 over 1 bar the injectores dosent suply enough, and on gen3 (also gen2 with bigger injectors and other ecu) over 1,2bar the stock pistons can break by the piston rings (dont know how to tell in english).
A stock ceramic ct20b turbo can supply savely arround 1,3bar over that the ceramic turbin can break, but thats ok because over 1,3bar also with metal turbin the turbo will blow as much hot air that you cant cool so its ineffective..
A stock ct26 turbocharger can effective supply around 1-1,1bar before it gets to much hot air.
For a gen3 swap i would recomend to open the gen3 and look inside to know how it is and change the gaskets, water pump and oil pump because you never know if they are good or not before its to late
Its nearly the same thing if you rebuild your gen2, i dont know why you would rebuild (if its broken or only because high mileage) but its the same work. So look for your money and your goals and then decide what you whant