Looks good! It would be even nicer with a full-sized P neck
Speaking of necks, it seems a little misaligned. If you haven't already, loosen the neck joint screws, grab the neck at the headstock, and pull it towards the E string side (gently, but firmly). This will align the neck with the pickup and strings will travel down the fretboard evenly on both sides.
Personally, I'd keep electronics as is, it's simple and elegant. It would be tight to fit a varitone in place of that switch anyway. Maybe try a couple of different caps, see what you like, and replace (if needed) the two caps on the switch. Typically I don't think more than 2 carefully selected caps would be all that useful. If you go full varitone, just replace the tone knob.