First of all, congrats on buying a Mustang. :-D
Before you do anything you need to decide what you ultimately want out of your Mustang. Mild street cruiser? Drag strip performer? Road racer? Show car?
Believe me, nothing sucks more than buying parts twice because you decide later to go in a different direction.
Before you do anything, give your car a tuneup, unless you happen to have a good service history of the car. Most 10 year-old cars aren't well-cared for internally.
Little things you can do relatively inexpensively to get more actual RWHP - remove the air silencer, get a performance air filter, exhaust system (headers, catback, and depending on where you live, a new midpipe). Underdrive pulleys are common, so is removing the smog pump (again, depending on where you live). Bigger throttle bodies, bigger MAFs usually don't help much (and can hurt) until you start talking about a heads/cam/intake swap.
"Normal" 94-95 GTs run about 215 FWHP, 185 RWHP. The 5.0L has a ton more power potential in it - Ford muzzled it for CAFE and the EPA - a mild build-up can net 300 RWHP on a stock block with no problems. (Ford's own GT-40 upgrade package, at www.fordracingparts.com
, which is pretty tame, will give it 295 FWHP.)
We haven't even touched braking and handling yet. :-P Remember the Mustang GT is basically a power package dropped into an entry-level car.
Cylinder heads, camshafts, intakes, power adders, and new blocks are where the real power is. But that's also where the real money, and the real time investment kick in. Are you racing your Mustang? Do you need this kind of stuff? Can you afford it?
Reliability is all in the details. How you take care of your Mustang, what combination of parts you pick and definitely your final tune (modifying the EFI computer to your particular combo). There's an owner on StangNet with a yellow SN95, 800 RWHP with a turbo and an AODE that's a reliable street/strip cruiser. It was just featured in the Muscle Mustangs magazine. There's also owners with stock engines that can't get them to run right 6 days out of the week.