Your 1968's points distributor is a duel advance unit and will work fine with the Weber carb. Yes the later 250 & 200 heads will bolt on and give you a boost in power. X4 these 1969 to 1983 heads all have a larger combustion chamber of about 62 CC's (compared to your 1968 and older heads of 52 CC). They all have a larger log, a 1 3/4 inch carb mounting hole all that was mentioned above, they also have larger intake ports for better flow almost everything is a good benefit except for the larger 62 CC's combustion chambers. But as wsa111 posted above you will only need to mill the head and that will fix that item, you can also direct mount the Weber (this gives the most power) or open up the carb opening to 2 to 2 1/8 inch and use a 2V to 1V carb adapter as a decent upgrade.
Being you have a 1968 Mustang the 250 would fit easy into your car if you wanted to do the extra work and would give you quite a boost in torque. If that 1970 250 is in good running codistion that might be a worth while swap, it would require a different bell housing to fit it but if your trans is a C4 auto that's easy enough to do. All the 1969 to 1983 heads are quite good the best picks in the large log heads are from 1977 up with the last ones used in the 1980 to 1983 200's and 250's being the best ones by a small margin having the largest of all the logs, the 1977 up heads also have the benefit of the larger 1 3/4 inch intake valves. You can get a decent performance increase with 1970 head just doing the milling to get the chambers down to 52 to 48 CC's. Other mod's to max out the performance are installing larger intake 1 3/4 inch or bigger valves & 1.5 inch exhaust valves, pocket porting / blending the valve bowls & narrowing the valve guides, a good 3 angel valve job and back cutting of the intakes, adding the center exhaust divider, and a full porting of the exhaust are all good mod's to do. Best of luck