Regarding chips, forget Conforti and the other big name ones out there. Those are all pretty old tunes, and while Conforti made a good one, I now recommend Sssquid Tuning. I've worked with the owner for a number of years on reverse engineering the ECUs in our cars, and I am confident that nobody knows the M42 better than them as far as tunes. (I have zero commercial link to Sssquid nor do I get any financial gain from recommending them)
As far as how the engine handles high RPM...it depends on the amount of existing internal wear, lubrication & that sort of thing. A well maintained M42 should take a pretty good beating. Personally, I wouldn't really want to hold >7000RPM for 30 seconds on an old, stock engine.