The V8 spindles used from 64-66 are the same for disc and drum brakes. To convert, you'll need the caliper brackets, calipers, disc/drum master cylinder and a proportioning valve.
"Scary loose" steering can be caused by tons of things. The most common are a worn or misadjusted steering box, worn suspension parts and poor wheel alignment. Flaming River makes a good replacement box (I have one and like it) and there are also places that sell originals and one place that rebuilds them (he frequents another forum and has a good reputation, although he is busy and takes a while to get them done. He has a web site - http://www.stangerssite.com/
). The suspension parts are available through the major classic Mustang suppliers and sometimes at your local auto parts store. Alignment is always an issue because most techs today don't have a clue how to do a classic vehicle. The best way I've been able to find a good tech is by asking members of the local car club where they take their vehicles. I have always found a good place.
I honestly don't know if there are good kits out there for the brakes and power steering. There are kits listed in several of the catalogs for the Mustang suppliers (National Parts Depot, John's Mustang, etc.) that might be suitable but I have no information about them. Your best bet might be to Google 65 Mustang disc brake kit and do some reading.
As far as wheels a 15x7 with no more than 4.25 inches of backspacing (distance between mounting flange and inside of rim) is probably the best wheel to give you good brake caliper clearance and tire choices.