The 5.7L is a 255H/330T. Peak torque is around 2700rpm
The 5.3L is a 285H/325T. Peak torque is around 4000rpm.
Stock to stock I would rather have the 5.7 personally. The powerband is more useable since it peaks at a slower speed. If that truck has the 4.10 axle, it will be perfect for towing in 3rd in the 60-65mph range! I had a '97 K1500 with the 3.73 and it was a little bit on the tall side. My trailer weighs around 6k and it was a little on the heavy side IMO. I had a hard time keeping the torque convertor locked (so trans heat was an issue) with my tall TH. A more normal height (shorter) trailer would have helped. I did pull a 35hp tractor on a flatbed, prob 7-7500 total weight (very low wind resistance), and it handled it surprisingly well!
For me the weak link was the trans. If mine would have been a 5spd manual trans, I would still have that truck. I upgraded only because of my trailer. I don't know if having the 80E over my 60E will make a large difference in trans tuning. I think it will out tow the 5.3; you just don't have to spin it as hard to make the power.
I sold that truck with 244k. The low cylinder was 165, the others were 170-175. The weak links are the lower intake manifold gaskets leaking coolant, stupid plastic distributor, poppet injectors that can leak fuel. I feel they are easy to work on.
If it is a clean truck, get it. It will do better than the Avalanche.
2005 2500 Cummins/48RE/3.73, QCLB, 4wd, BigHorn, Edge Juice w/ CTS + Turbo Timer,Transgo Shift Kit ISSPro Oil and LP pressure gauges, GDP 20/2 filters, Custom Diesel Steering Box Brace
'10 Forest River Shockwave Toy Hauler 21'
Honda EU3000I Genny