As I recall, one difference is the transmission, one is a 3 speed (with overdrive?) and the other is 4 speed, so probably the 3 speed is meant to be a 352, which was the hi-performance option in 1960 and the other can be a 390, 406, 427 since externally they are nearly identical.
Late to this thread but wanted to put my 2 cents worth. We are in the golden age of modeling. Many old classic kits are still or newly available, new kits, done to superb levels of details have been coming out, and after-market parts are available in abundance. Here in the Denver-area we have the best hobby shops I've ever seen (and I've traveled to many areas looking at their shops). The internet has allowed us to communicate with fellow modelers, look at pictures of each others' builds, share ideas, buy from shops all over the world, and access reference materials on all sorts of modeling subjects. I can't imagine it getting better than this. The hobby may die off if only older people are interested or participate, but I do see some younger (than me) people getting involved and I see kids in the hobby shops so there may be long term hope. I'm just happy to get to build kits I couldn't get or afford as a kid, with tools and techniques that I couldn't afford or that didn't exist. I'm living out my young model-building dreams!
After reading the various posts regarding Revell's LX Mustang I thought of the book, "Master Modeler: Creating the Tamiya Style", that talks about the Tamiya Company and how it has come to be. He has a chapter called "Models: More Than Mere Miniatures", where he talks about building the wood masters using literal, scaled down measurements but the model never looked right. To get it right they ended up adding to the width and modifying the height away from the actual measurements until it "looked right". To me this implies that producing a good, accurate model can be an artistic as much as formulaic exercise and efforts to get a car looking right can be interpretive effort. When I first saw the 1:1 LX during a test drive I thought the rear roof proportions looked odd and much preferred the hatchback. The Revell interpretation actually looks better to me than the real thing! So I wonder if the kit designer shared my sense of proportions and chopped the roof to get it to "look right"?
BTW, this book is an excellent insight into the process of model kit manufacturing and very interesting if you want to know how they do it.
As a kid I used to go thru the Ford brochures cover to cover and I remember seeing a listing for those clear headlight covers for the 65 Galaxie. I believe they were a dealer installed option and extremely rare. In fact this may be the first time I've ever seen a photo of them. In those days each state had rules about covering headlights and those covers may not have been legal in all 50 states. The '66 7-Litre didn't have them as standard and I don't know if they were offered. Great build!