The 446 has not progressed at all. It took a back seat to my move this summer.
A lot of guys would agree with your assertion as to hydros over gear drives. Personally, I prefer to change belts instead hydraulic pumps and being able to slow down, steer and lift or disengage an implement simultaneously is a nice feature as well. I'll never be a fan of console controlled hydros for that reason. In terms of varying speed, you should do some reading in the gear drive section on the variator in the 200 series. It is basically a double belt variable drive system similar to a snowmobile drive which gives you multiple speeds in the same gear that also self-adjusts its ground speed to keep the PTO speed optimal. It's pretty cool.
On to the 317. You simply cannot beat a free tractor. Personally, I would look long and hard at rebuilding the KT17 that is in it. The design has obvious issues when run at an angle but if the engine can be made to run for the cost of rings that beats the snot out of dropping $1800 for a Magnum retrofit. Knowledge of the problem is the best way to avoid issues with the series 1 tractors.
In terms of checking that out, like the guys above mentioned, use a bore gauge to see what you really have there. If you don't have one, there should be one at school. It is in the green toolbox in one of the bottom three drawers in a red case about the size of a big socket set. When you take your measurements take at least 4 per cylinder. Measure at both the top and bottom of the cylinder and take 2 measurements perpendicularly to one another. For example, N to S and then E to W. Don't measure the very top of the cylinder as there will be wear there from detonation.
Also, learn the stories that the tractor has to tell you. Ask the previous owner if you can but also make guesses based on the machine itself. For example, since your tractor was missing the steering column there is a good chance that assuming it was not salvaged for parts, that is why the tractor was parked. If that is the case, your engine might run like a top as is. Like we talked about in class, start off by fixing what's broken. Don't rip into anything unless you have a pretty good idea it is problematic. Usually machines stop running for 1 reason, not several. If you can get it going again then you can start looking into wear issues one at a time.