There shouldnt be any fitment problems from a 904 to 727. The size difference is mostly in the bell are and the main body, both should not affect the exhaust clearance. You may have to modify your linkage if you have column shift (rare for an E body). If you have console shift you need to make sure you get a trans with the two tabs to mount the shift bracket on the tailshaft. Column shift linkage is where you may come into problems with the headers but im betting you have console shifter.
For a street car the 727 would be the better option. You can build a bullet proof 904 but its going to be big $$$. A stock rebuild on the 727 should be good for a mild 340. I would recommend upgrading to a bolt in sprag assembly.