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I have a 21" STG58 of a similar vintage. I have also been contemplating mods to make it more suitable to my needs.
So far, I have swapped out the fsp for a zero dot to get the zero I wanted. I also swapped the stock rear sight for another one with a larger aperture. This works well enough that I have decided hold off on getting DSA's A2 para rear sight. I may still get it latter to have both the large and small apertures instead of the medium aperture that my current setup has.
I plan to swap the metal handguards for the DSA plastic ones along with their matching rail section so I can put a light on it. I will probably ditch the bipod as I like how losing the weight of the bipod felt on my other FAL. I had previously installed an X-stock but I swapped back to the original as it seems to manage recoil better.
I also want to add a DSA extended selector as the current one is almost AK level user unfriendly.
I have the DSA railed top cover installed and I plan to add a T1 type red dot to it.
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I have the rail top on mine also I'm mostly looking at upgrading the stock and replace the metal for arm on this just to make it a little lighter. Also like to find a good modern sling like a three point that would work for it. I don't thing my neck would enjoy a one point sling.
I'm not sure about taking the bi pod legs off it yet it will make it lighter but I have found them very useful several times wish they made lighter ones.
Scope I'm waiting and saving up for an ACOG for my baby! Learned to love them in the Marines just th price of them is as much as a new rifle and it's kind of hard to spend the money!
Have other weapons I also want to add like a Glock 21, Lever action 45LC , 45 LC wheel gun and a long range rifle that I'm unsure of the caliber right now.