Costs
First, the bolt in your 221 is for the small head cartridges. So, the 222, 223 sized cartridges is about the limit unless you replace the bolt with one from the same size as the 243, 6mm or 308 family of go big and find a 6.5 or 350 mag bolt. Maybe the bolt face and extractor can be modified to accept a larger case head. But, that would probably cost as much as a bolt. Then you need a trigger. The trigger group is the same except the XP has the trigger moved forward and it operates the group via an extension piece. The factory triggers are actually quite good. Their are aftermarket triggers that will fit.
Barrels. any barrel that will fit a model 700 will fit a XP, 600 or 660. But they are not long actions. The only way you could uses anything longer than 308 length is vial removing bolt every shot. In fact although my 2 6mm Remington 600s eject live rounds fine, I had to clearance the XP action I made into 6mm Remington slightly so the tips of 105 rounds wouldn't hang up if I ejected them. Empties of course being no problem.
I bought the 6.5 Creedmore conversion above as a 308 for $550, the Boyd stock was $300, the new model 700 heavy barrel was $200 and the 6-18 scope was another $250 or so. So with shipping and things like an extra barrel lug I could use to set the head space. I probably ended up with about $1400+ in it doing all my own work. Having a gunsmith convert one and upgrading some of the pieces your looking at 2K up
You can find one in 222 Remington for $6-700, rend a 223 finish reamer and head space gauges for $60 and a reamer extension handle for $12 from
Reamer Rentals - 4D Reamer Rentals and have a pretty accurate 223 bolt gun if you stay below 55 gr bullets as I have always found them stock barrels to be accurate.
PS. I also vote for leaving it alone. You can buy good actions and even decent varmint rifles for less than the value of a stock
XP100. If you keep an eye on Gunbroker you could pick up a 600 with a 243/308 bolt face for $6-800 and then have an air gauged Douglas premium varmint barrel in the caliber of your choice fit on it for $5-600. Open up the barrel channel and your set or spend another $300 for a Boyds stock.