[Dutchdivco]

Yes, 1966 was when the car co.s began to respond to emissions. Your Mom's 289 may have only had a PCV valve, not sure. That was actually the first step. And, there was a period when they made cars with an ECU and carbs, but it didn't work very well.
Irony of the laws is that they go by the year of the chassis, not the engine.So, it wouldn't be practical to put an older engine in a newer chassis, as it would be required to meet the emission requirements based on the date of the chassis. You CAN put a newer engine in an older chassis. In fact, I bought one of my older engines off a guy who, with his sons, runs a business out of his house. He buys old classics, and totaled (wreck) newer cars, and puts the newer powerplants in the older bodies.I guess its for people who want the older car look, but are concerned about parts or repairs so want the newer powerplants.
Thing is, I feel that trying to improve the mileage on newer emission controlled motors is handicapping myself, (already discussed)parts for these motors are plentiful and CHEAPER than parts for newer engines,and these engines have plenty of power. After all, they had to move the old, heavy bodies down the road.There are certain things that are designed into a motor; some motors have longer connecting rods,and lend them selves to "hotrodding" i.e.suping up for high speed and RPM's. Others don't, and aren't.Like the Ford L6 223, and the plymouth slant 6.These engines were built for low end power, and max sustained RPM of 3500-4000.Max sustained speeds of 65-75 mph.They were built for mileage. In fact, the 223 was called the 'mileage maker'.Rebuildable engines can be had for $150-300, pistons for $100/set, valves for $40.00/set, cams for under $100; all the parts needed to rebuild the engine for $500 or so. A little machine shop work, and doing the rebuilding yourself, (and they are simple and basic enough you CAN do it yourself!)you can have a New engine for around $1000.
Then, tranny adaptors are available. Back then, they made a whole line of engines so they could all bolt up to the same trannies, and, thanks to the hotrodders, adaptors are now made to bolt up the "hotrod" engines of the era to newer trannies.So, for example, if you want a 700R4 tranny, there is an adaptor for that.These old cars mostly have leaf spring suspensions, which makes it fairly easy to swap in a different rear end, with taller gears, and disc brakes if you want. Disc brake conversions are available for the front axle, and converting to airbag suspension, so the leaf spring is only for alighnment and attachment of the axle, and the bag is adjusted for ride.
Now, do whatever experiments you want on the engine, free from the constraints of the emission controls and the inspectors.Then, look at selectively reducing the weight,and bellypan and aeromods.
Your Mom's Falcon got 30mpg, and that was with an old tranny, (probably not overdrive, although they had a few back then, and even earlier), the old, low geared rear end, no mods to the engine, (fuel heater, air restriction, etc.) heavy unaerodynamic body.Wonder what it COULD get,...