The 5 speed in an 88 is even weaker than the nv3500 which is only rated to 300tq. It also doesn't shift fast. The T56 is a great tranny in the LS T56 version, not so much in the easier to adapt to a Gen 1 small/big block LT T56 version. The LT version uses an odd pull style clutch that severely limits your choices and they are all expensive. There is also something about a different starter (some V6 starter comes to mind). The T56 is a much more performance oriented tranny and it shifts good quickly.
As far as putting one in; the shifter sits about 6 inches further back, it fits in the tranny tunnel well, you have to move the cross member back, your master will work but you may be able to use your stock hydraulic line and if replacing a nv3500 then the drive shaft works.
As with anything there are upgrades. There is the T56 magnum, different gear ratios, stronger internals, a mid shift conversion to bring the shifter up through the original hole, speed bleeders... the list goes on.
Myself I would do an entire set up out of an LS powered F body, get a light weight flywheel, LS7 dual clutch, upgraded master and slave (probably Tick), remote speed bleeder and a good short throw shifter. In other words, I'd probably throw 4-5k at it.