It would be a fairly expensive job to put an adjustable rear sight on a saa. There's not as much steel on the frame top as on a New Frontier, so it'd have to be a tiny sight. The front sight would have to be changed also, making a $1000-$1500 Colt into a strange looking gun with no resale value whatsoever. Changing barrels is not a problem-there's several Colt specialists around the country that will do that. Why not just save and buy a New Frontier? You'll have an original gun, and the money spent would make up for the money you'd lose by devaluing the saa.
I would NOT convert a genuine SAA to adjustable sights! Maybe a used "clone",in the $250-300 range,but not a genuine article;as asa said you will lose a great deal of money! I bought a .44 special that someone had converted,for a low price,and that is about what it is worth to most everyone,even though it is a super shooter. That said,an S&W rear sight assembly can be milled into the groove for the rear sight,without removing a dangerous amount of metal. You will also need a much higher front sight and ramp put on the barrel(you asked about shortening it anyway) to match the higher rear sight. Look for a short barrel (4 3/4 or 5 1/2 inch) New Frontier Third Generation-this will be cheaper(and probably better) than what you would lose "converting" a genuine SAA! Good Luck,Bud