Hi John,
OK, I can try and answer your questions.
First of all, your Mac can actually run any OS up to and including the latest one, El Capitan. So yes, it can definitely run OS 10.8.5, ie, Lion.
Secondly, upgrading the Ram from 2 gb to 6 gb is a great way to go!
Third, a "pure" SSD is the best way to go. So, if 256 gig of space is enough for you, then a 256 gig SSD is a wise choice. For that upgrade, are you doing it? Or are you having it done? The reason I ask is that you can also install the 160 gig HDD inside an external case, and connect to your MacBook Pro via any of the 3 ports you have. For speed purposes, I suggest an external case that has both a Firewire 800 port and a USB 2.0 or 3.0 port. They are not that expensive. In fact, recently I purchased an iomega external case that has 2 Firewire 800 and 2 USB 2.0 ports for less than $30. I then installed my 1 TB, 7200 rpm Seagate drive inside it, and it works like a charm. I actually partitioned the drive into 3 partitions, with two of the partitions being 250 gig each in size that I use to backup both my Mac Min i and my MacBook Air. The backups go quickly via the Firewire 800 connection.
As for an SSD, ones made by Samsung are the best. You should be able to get a 250 gig 850 EVO one for less than $100. A Samsung 256 gig 850 Pro SSD will cost more, and will last "slightly" longer, but just about all the other specs are identical.