I agree with both of you. I think in my mind a modification is 1) power. . .and if not power then a combination of X amount of changes. 3-5 sound about right? Restoration people will argue. . .but there has to be a line.
A V-6 vs. V8 should not warrant another class (unless the show can afford it then yes). . .but should a 1965 Shelby or a 1968 California Special really go against a rock stock 1966 Coupe??? Should their be a specialty class that includes ALL SHELBY's ALL YEARS and other specialty mustangs?