I love small bikes myself... 2nd bike on my list to finish is a CR250 motor in a striped down CB125R frame.
It helps to stick with a 2 stroke but I bet a litre bike would have a hard time keeping up with a 60 hp bike that weighs only 200 lbs. (around town)
Now we're talking! Saw a build thread where guy put 450MX 4 stroke into CB200 vintage bike. Looked pretty hairy! Good luck with your build.