Howdy and welcome.
First off, where you start isn't as important as starting somewhere and not quitting on it. If you're really going to do a frame off, make sure that you fully understand how much work is involved, how long it's going to take, and how expensive it's going to be. For example - just this past November I finished a frame off on my 69. Elapsed time start to finish -- about 25 years. Cost? easily double what the car would ever sell for.
More of these cars die the death of disassembly and abandonment than anything else, and that's a fact.
I'm not trying to talk you out of it, just make sure you know what's involved.
First order of business is for you to decide why. Are you building the car for yourself to enjoy, or are you building it as sort of an investment? If it's the former, then do whatever you want to it and make no apologies - don't worry about resale value. That's the route I took on my 69 because I did it for me and never plan to sell it. Doing a car for resale is valid too, if that's your thing. Just be aware that especially in the current market, you'll never be able to recoup what it's going to cost you. If you want an investment 99% of the time you'll be way ahead buying a car that's already done, enjoying it for awhile, then selling it.
Most of the time, to maximize resale value it's usually best to stay as original as possible.
Ok, you say the engine is trash. What's wrong with it? If it's an early 67 then there's not really any such thing as a numbers matching block for 67 because that's before Pontiac started putting vin stamps on the blocks. So if you want to be able to say it's "all original" for resale purposes all you really have to do is find a block (and heads and intake if you need them) that have date codes in a reasonable range of when your car was built, the right casting numbers, and the proper two character block code. Of course it won't actually be all original if you do that but no one will be able to tell. That's up to how honest you want to be about it.
If you're building the car for you, then the sky's the limit. In that case you need to decide what you want the car to be and how you're going to use it. Strictly show? Street only? Street/strip? Pure race car? Local cruiser or highway miles? Each of those choices will tend to send your build in different directions.
There's a lot of experience here on the forum, and something I like about most of the folks here is that we'll shy away from telling you what you "should" do until we know more about what you want. You're the one who'll be spending the cash, so you get to make the choices.