It is not always about peek HP. If the new engine flattens the torque curve and brings more torque to the party at lower RPM it will have a significant effect on acceleration from a dead stop. The 3.5 does not seem to really get spooled up until about 3000rpm. If the 3.7L drops that peek trque by a 500 rpm you would feel a significant difference.
It might not make up a full 1/2 second ( it could ), but a 1/4 of a second would not be unexpected.
As for MPG the same thing applies. Everytime the trans downshifts to maintain a speed up a hill, you lose MPG. If the new engine has enough extra torque so that it does not need to downshift as often it will improve gas milage.
In the old days ( before direct port fuel injection ) any increas in engine size usually ment that it would be less fuel efficient. In a modern engine the injectors will only put as much fuel as necessary in the engine to meet the torque demand unlike an old carburator that will nearly the same amount of fuel at a given RPM reguardless on the torque required to run the engine at a given RPM.
My guess? 1/4 second faster 0-60mph and about 0.05 sec faster in the 1/4 mile.