There is a steel/iron sleeve inside the aluminum cylinder. They make oversized pistons so it's okay to bore them larger, usually .020 (.5mm) is standard oversize they do make larger but I personally wouldn't want to go that big in the stock sleeve.
You can do the top end with the engine in the machine. You have to remove the seat support. I recently just removed my entire engine to do top end and a cam, there's only two motor mount bolts but you do have to loosen the differentials and slide the drive shafts back and fwd from engine, I had to remove front anyway to get front cover off. But for me (and my back!) so much easier on a bench in front of you, than leaning over the machine all the time. Engine is heavy but not "that" heavy. I'm a big guy but don't think I'm above average strength, and I could carry engine around, just used a come-along to lower it in. There's another application motor mount on the left side I used a 3/8" 6" long bolt, and on the front right side of cylinder head there's some metric threaded holes (6mm or 8mm can't remember) where they use another motor mount in quads. These two points is where I connected chain to lift and lower engine. Just my $0.02. At the moment I decided to remove engine instead of pulling seat support I had motor on bench in like 65-70 minutes. That's unhooking all the electrical connectors, loosening battery box just to move it away, rear differential/driveshaft, starter & shift motors, lower water hose and, motor mounts. Hopefully not forgetting something but you get the idea!
I never swamped mine but after 2500 miles there was maybe two score lines in the cylinder I COULD NOT grab a finger nail on. Still good cross hatch. I know your situation is different but when I was an engine machinist 99.99999% of Honda single cylinders that came in the shop to get bored from burning oil and weaker compression had nothing more than glazed cylinders still within spec. Meaning they really just needed a quick light hone and new rings. But if your cylinder is scored where you can feel the lines I highly recommend reboring and therefore new piston. It could be cheaper just to buy a cylinder/piston kit on EBay too.
I don't know of any issues. I'd remove your lifters and mark them so you know what hole they came out of. Techincally they don't need to be removed but in the case you roll the engine to look inside while you're swapping pistons (if you're going that route) or whatever you don't have to worry about them falling out and not knowing what hole they came out of!