[Bill Hilly]

The 17/42 sprockets will quite possibly be too high for you, and your girlfriend. The Hawk has a big enough rear tire that you may be better to run a 46-47, and a 17. The exhaust, and proper jetting of your carb ,along with a better chain, Honda rear sprocket studs, and what ever sprockets you decide on , are probably the only mods that you may want to do to a new bike. If you are determined to go with a big bore, the you should also port the head, and then the PE28 may be a little smaller than desired. I would at least run the bike some with the common simple mods, before going the whole 9 yards with it.
You can get killed on any bike, and a light bike is especially affected by wind, and passing trucks. You stated that you may go with smaller wheels, or eventually buy a TBR7, but like the other guy said, these are not ideal highway bikes. One of the cheapest, and usually low mileage small cruisers is the Suzuki Savage/S40, LS650, and a pretty good one is going to cost you about what a new TBR7 would cost. They are easy for anyone to handle, because they are low, and they have plenty of torque, and a very wide ratio transmission to optimize the torque, There are other options out there as well.