Whether or not it NEEDS to be overbored will be determined by an inspection of the cylinders. Usually it is a required step in a proper complete rebuild to ensure a long life, but sometimes a simple hone followed up by a new ring set will restore ring seal in an otherwise sound engine. The amount you need to bore will be determined by the amount of material you need to remove to clean up the cylinder walls, compared to available replacement parts. If the engine would clean up with say a .040" overbore, but you can only find .060 over pistons.....then you bore it .060 over. If it cleans up with removing less material than .030, then go with that and have some left for a future rebuild.
Boring it will raise compression slightly, but not enough to wake it up. Shaving the head will bump compression and in return provide crisper throttle response and more power. If you are hopping it up, going to a longer duration camshaft in the 258 will require raising the compression to keep the lower rpm torque production from suffering. Since you will need new pistons to go along with the overbore, you can get pistons that will slightly raise the compression....just stay away from large domed pistons. Shoot for 9.5:1 compression ratio and you'll stay detonation free with unleaded.