Nope, you don't have to. We will probably adjust the front torsion bars for more ground clearance and I've got a reduction hub gearbox (gearbox is blown but hubs are still good) so we'll put the hubs on if we can be bothered taking the gearbox apart (you have to turn the diff upside down for the hubs to work, otherwise you get 4 reverse gears and one forward gear

). The reduction hubs give you an extra about 4" of ground clearance and lower gearing. There's no point in jacking up the rear suspension because it's a swing arm set up so you just get incredible positive camber, later bugs had different rear suspension.
All the suspension is mounted to the floor pan(think of the floor pan as a pressed steel chassis) and so is the engine, you could drive it like this but I don't think the floor pan would take the weight though, with out the body on it was bending considerably so we put some jack stands under it. Anyways, because everything mounts to the floor pan you don't need to make mounts for anything either (apart from the steering column).
A friend just asked around for any old beetles, he found a guy that had a bunch of them sitting in a paddock, the guy just said take that one, I'l never use it for anything. And so he came home with a beetle

.
That friend's had tons of VWs though, he knows where to look.
His plans are to try and get it registered as a re bodied chassis and if he cant he's going to shorten the floorpan (did anyone say wheelies?

).
I'l post pictures tomorrow.
Thanks
Hayden