Everyone's given good advice here, but I'll just add my 0.02222 cents...
Unless the rules have changed since 2011, the swap should be fine. My good mate did it back then with no paper work issues at all, just act sensible at Vicroads when you hand in the papers for engine swap. No eng cert required, I actually emailed a local VACC registered engineer about something similar (SR20DE into S14) and he said the fact that I'm putting a less powered engine into the car, it is the least of their worries. More importantly is the chassis integrity but it's a straight swap so problems there mate!
Wiring: My mate sent his engine wiring loom to some guy in QLD to make it a plug and play with the R32 chassis. If I remember it cost less than $400 inc postage. Most economical way imo. His forum name is viiictor if u wanna PM but I don't think he's active here anymore
I can understand why he'd want to do something like this:
NA R32 are much less common than tubbys. Also RB20 will be a slug compared to RB25 Found a clean shell/example RWD>FWD (subjective!). Given a same driver behind the wheel, the only cars that has potential could beat you are those pesky VTECs or an NA MR2. Prob a few more examples I can't think of atm. Also, drifto baby!!! Better to have experience in RWD once you transistion into more power in later years. Maybe he likes R32s over R33s
That being said, a difficult popo MAY dick you for it but when my mate had the car, two encounters with the popo there was no problem (2nd time was because of something else related). Mate was just sensible about it. And yes, as everyone says, it will not be cheap so prepare for that. It's better to do something like this with extra money for headroom; you can trust me and everyone else on this with experience. And just another thing before I fack off, ex-P plater to P plater, respect the handling of a RWD, driving limits, peer pressure and speed in general or you may find yourself in a situation you wished never happened. Not trying to make any claims or suggestions for all I know you could be the best driver out there or the worst, but I feel it's almost my responsibily to say these things just incase...so I will leave you with this if you like to read
http://treetran.org/2012/10/25/i-should-have-bought-a-beater-p-platers-and-young-drivers-read-this/
Personally, and in summary of that article, I'd just get an R31
Anyways...gl on your future endeavours!