I completed a Kswap on my DC2, so for a quick answer to your questions:
Using a complete EP3 will let you know the history of the engine and it should work out more cost effective if you can find a good one at good money
Downside is that you have an EP3 shell taking up space that you have to sell bits off
I chose to buy an EP3 engine with box, loom, ECU and shafts from a breaker before it was taken out of a 70k facelift EP3
As for shafts I didn't end up using the EP3 shafts as they are slightly too short. Instead Ordered a pair of RSX Type-S shafts from eBay US and you need to swap the inner CV joints to run them on opposite sides of the car. Honda shafts are better than most aftermarket shafts and I have been running mine on track for 2 years on full slicks and plated diff and they are like new
Buying the K20 engine, loom and box isn't that expensive it's all the other parts that quickly add up like the mounts, conv harness, swap manifold, possibly bigger exhaust, swap radiator (though you can use EP3 rad)
Then if you do what most people tend to and start tuning the K20 then it gets even more expensive, Kpro and tuning, LSD, RBC/RRC, possibly cams and throttle body
Tuning the k20 gives a lot better gains than a standard internal B18 for example
As for the bottom end knocking, B-series engines can knock as well if they are not looked after properly. I believe that because the EP3 is a more mass produced and owned car than the likes of a rarer DC2/EK9 that people tend to abuse the EP3 more and have no idea how to look after the engine. Oil starvation is probably the main cause of bearing failure