Hi Alex,
I would not go for such a long duration cam on a standard M40 - the compression ratio is too low at 8.8:1. You will lose low and mid-range power as well as gain a rough idle. Further, to get a long duration cam to work on a motor, one needs to flow the head and install larger valves. It's a do it properly or money waster situation.
To answer your question, a remap would optimise the timing as any changes to the motor need to be accounted for by a new mapping to achieve the best gains. Otherwise, it would probably work alright without a remap, but not reach its design goals.
The flywheel conversion would probably be the best bang for buck conversion available to these motors. The standard flywheel is approx 9.9kg on the M40 motor. This conversion is common on the M42 motors and has a large effect upon acceleration. As you are aware, when you convert to manual, you will have to buy a manual flywheel so why not buy a lighter version.
As regards the diff, definitely do not go to a longer final drive, especially if you install a long duration cam. The shorter final drive will allow the motor to rev up much better. Installing a long duration cam pushes the power band further up the rev range which means your power will only really come on at higher revs and feel flat below that. You need a short final drive so that you can rev up quickly, otherwise you will be stuck working the motor hard just trying to get the revs up. Your acceleration will be stunted in other words.
Other mods you could look at are doing a good porting job on the head, branches, cam and definitely the manual conversion if this is to be done. The M40 motor is not a racer, and these types of mods are not going to increase torque significantly. But if you are going to go with a cam, go for a shorter duration cam with more lift, it will be more satisfying.
Here is a link that will give you good insights:
http://www.pumaracing.co.uk/index.htm
Hope that helps