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It really sounds like you are not much of a mechanical person if you are unsure about your ability to fix this vehicle so because of that I would say that putting a diesel engine on it is going to be way way over your head, besides the diesel engines out there that would fit this start at about $900 and weight over 50 pounds and does not have a transmission on it, your current engine shares a case with the transmission, shares oil, when you split the case open it's hard to tell when the engine stops and the transmission starts, a diesel is also going to vibrate enough that it will rip the frame apart, besides it being to big to fit in the space you have, you basically need a good size motorcycle frame for one of the hatz 7hp diesels to fit from the checking I've done, a Yamaha rd350 would be a better start for a diesel bike as their engines burn up quickly and their tranny has it's own oil.
I also don't see where you are going to have space for batteries if you want more then a 5 mile range as an electric unless you put them on either side of the rack, but at 50+ pounds each you will need a good size rack for the 3-4 batteries.
I voted to restore/fix it, because if you spend $300 on new parts from the dealership and buy a repair book then it is just a matter of fallowing the dirrections in the book, unbolting old parts and bolting on new parts, adjusting things to their specs, then ridding it, at 70cc it should have no problem hitting 45mph, I'm 235lb and if I found one of these I would ride it on roads with a 45mph speed limit, so in short, if you can read and fallow directions, have a 10mm and 12mm wrench and a phillips screw driver you should be able to fix this for $300 or less and will have a 120mpg vehicle, if you can't fix it then sell it, if you are need Wisconsin then sell it to me.
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