Nice factory folder you have there. The best upgrade for the rear sight is the
Tech Sight. And yes you can replace it at home.
Regarding the scope, IMHO the best scope mount is the S&K for the Mini-14. The only drawback to this scope mount replaces the rear sight and you would have no iron sights.
I would recommend you get an Ultimak handguard and mount a long eye relief "scout" style scope or a red dot. This option will allow you to keep the rear sight incase of optical or red dot malfunctions.
Also, stick with factory magazines for best performance. I have heard that the 2nd generation Tapco mags seem pretty good.