Your earlier estimate of $7k including trade-in is in the ballpark for a repower to a 90, possibly more depending on options or going to larger HP.
Yes, you can re-use the existing controls as well as the analog tach with a new Merc 90. As Bob indicated the new Mercs are NMEA2000 compatible, but that's about a $1500 upgrade (worth it in my opinion - the digitial tach is much nicer, and displays lots of other data points, including fuel burn. Will also interface with your NMEA 2000 compatible GPS devices, but not sure if the boat has them anyway.).
If sticking with Merc, be sure to get a 2014 or newer Command Thrust version, either 115 or 90 should be fine, they are both the same 2.1L block, larger displacement than other brand's 90's but not as big and heavy as some 115's. The 115 is about $1500 more than the 90. These Command Thrust versions run the larger V6 lower units so you are swinging a big 15x17 prop with a lower gear ratio than what a Honda or Yamaha 90 has. I've not felt underpowered with my CT90 hauling 4 large men and gear, and have not for a second regretted getting the 90 over the 115, and using the saved money on the digital gauges / NMEA interface instead.
As a side note, if you're into doing your own maintenance, these new Mercs are awesome. Oil changes, filter changes, plugs, lower unit - it's all so easy and completely mess-free, I'm now a convert - much easier to do yourself than hassle with scheduling a dealer service. I've had mine just over a year and am currently at 220 hours and counting.
As Bob suggested, try the 60 first (sounds like it's a similar Big Foot version as the newer Command Thrust, and might be OK if lightly loaded), and then if you decide to upgrade, you have some great options in the Merc 90 or 115 CT models without having to change gauges or controls. Also be sure to get a Permatrim on whatever motor you get (about $140)!
-Mike