RE: Project for Engineering class
You could stroke it, bore it, port it, lighten the crankshaft, and bore out the carb.
Realistically a port job from a shop and a nice exhaust would be most effective and fairly easy to do on your part. I would imagine the cranks on chainsaws are pretty heavy, taking it to a machine shop to have it lightened and balance would add a lot of snap. While your in the engine I would freshen up all the bearing, gaskets and inspect wear parts for any stress crack or other obvious damage. A crank bearing or connecting rod failure isnt pretty!
If you have access to a newer engine I would use it. Stihl gets up to the 120cc/8 horsepower range. According to a snippet of google info yours was rated at 3.5 when it was new.