1: yes bigger valve, no on compression loss....thd 38 heads have a smaller chamber cc than the 35 heads.
2: no need of worrying about low compression ratio with this combo...answer 1 tells why.
3: no....your correct, you will have 38 cid engine... but will have more control over the piston to cylinder clearance when boring the 35 block to accept the intek piston, which is also a flat top piston, giving you a much better compresion ratio vs the stock 38 pistons being cut down...which still leaves a slight dish in it after machining.