Disc brakes are nice, but not a must. That RB50 motor is not particulary powerful. It's probably heavier, but the bike you build will still be pretty light.
I think that this is a great project. Especially if you machine motor mounts for it; if you're the type of person who switches engines on things, make it as easy as possible on the future version of you who's going to swap in something else.
I don't understand A-Ko's comment. Can't one also ask: "If you're going to turn a moped into a motorcycle, why not pick a moped that already looks like one?"
If I had a problem it would be the stated "need" for gears, and impression that this doesn't violate the spirit of the law because it's still 50cc.
You're talking about swapping a two-speed _automatic_ engine for a four-speed manual. That not only violates the spirit of the law, but the actual letter.