AK, if I were you, I'd get a set of those Crimson Trace laser grips. Good way to get a better "sight picture" without ruining future resale value, plus the cost would be comparable to all the other stuff you were thinking about...
I disagree but, would make an excellent squirrel gun? Would still trade for a more modern pistol to install red dot on.Good that you are shooting again and that is a spledid looking S&W.
A revolver like this is ideal for many applications but target shooting is not exactly what it was designed for. Once a dot sight is installed it is something that one would not take on and off, thus rendering the revolver pretty much only good for shooting paper at the range. After a few years you may have trouble remebering just where you put the original rear sight assembly.
Have you considered trying an auto? Many companies make scope ready 22 pistols that are designed for target work and have loyal followings and very reasonable prices. Buying, say, a Ruger or a Browning and working it up for target shooting would give you a dedicated range gun and you would still have your traditional wheelgun when (not if) you need it.