Depending on which exact 160GB model you have, that drive might be totally incompatible. Is this a "thin" or "thick" model (I assume the thick, since you want to swap backs, in which case you likely have one of those early classics with a CE/ATA drive that nobody else has ever used...)
RAM isn't going to be a problem. More RAM gives you longer runtimes, but that doesn't really depend on the disk size.
I have no idea if the battery and/or the back can be swapped.
If I were you, I'd wait a bit for the classic port to get more stable. There are some promising patches waiting to be integrated that should improve things a lot.