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Changing a car's color can be challenging, because you don't want patches of the old paint showing on the door jams, etc. Not impossible, just a lot of work to disassemble everything to get access to all the surfaces that need to be painted. Pulling the engine is just the beginning, because you should also remove all the other things in the engine compartment, degrease and clean, etc. before you can paint. If you really want a white car, it's probably easier to sell your blue one and buy a white one.
Dealing with the rust is also a significant job. What looks like a little patch of rust may actually be the surface manifestation of a much larger area of rust underneath.
As (no name) indicates, remove as much of the trim, door handles, etc. as possible prior to painting.
Finally, a paint job is no better than the surface preparation. That usually means lots of sanding/filling/priming/etc. to get a good smooth surface to paint on. Paying a shop to do it is expensive. Doing it yourself is a good option, but don't expect professional results the first time you try.
In general, you'll get what you pay for. If you go for the Maaco/EarlScheib cheap paint job, that's what you'll get. A good body shop can get it looking like new, but it won't be cheap.
The bottom line is that you're probably better off to sell the car and put the money from the car and what you're proposing to spend on the paint job into a newer car unless there's a strong emotional attachment or you're willing to do some or all of the work yourself.
Also, consider that the car with a rebuilt transmission will probably be worth less than what you're putting into the transmission rebuild. Are you really sure you want to put lots of money into a 17 year old car that might be worth $1000-1500 in good running condition? I'm not saying don't do it, because you may get lots of additional miles out of the car after the work. But there comes a time when it's no longer worth it to fix old cars unless you take on the project as a hobby.
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