Getting back to this.
Electronic engine management
we have been over to some extent but those old engines used some pretty simple ignition systems. Duel plugs for both better ignition and redundancy. Fired by duel magnetos, one magneto fired one set of plugs (most of the time) and because there was not a wide variation in operating rpm they often (very often) used fixed ignition timing.
Yes a modern computer controlled ignition system could probably provide much better performance and allow the the engine to operate closer to the edge.
However provide redundancy you need two
complete ignition systems. Which runs up weight and cost, You also in WW II would have to introduce new sensor technology. They had EGT gauges (exhaust gas temperature) and even exhaust gas analyzers (basically an oxygen or other gas sensor) but they were analog, depending on the value being measured they simply passed a different value voltage to the gauge. The gauge was little more than a voltmeter with a new scale pasted on and calibrated to the expected values. You either need a digital sensor or an analog to digital interface for your electronic engine management. Or you are operating at 1950s technology level with an analog computer.
Reduced reciprocating mass
This seems to be assuming better piston and connecting rod materials and/or better manufacturing techniques. Titanium so far seems out of the question. It wasn't really available in large pieces until the 1950s, during WW II it seems to have been used as a trace (low percentage) alloying element. The engine makers of th etime were constanly pushing the materials envelope as it was, yes in the 75 years since WW II things have gone much further but it is a question of not just changing existing designs but coming up with new, for the time, industries for industrial processes.
My now relatively old 2.0 liter is producing just over 2 HP per cubic inch or just over 125 HP per liter.
How much does your relativity old two liter engine weigh?
and can it produce 125hp per liter for 7 1/2 hours, 5 minutes at a time with 5 minute "cool down" periods (at around 60-70% power?, maybe more) between each full bore 5 minute run?
That was the US standard for War Emergency Power. The US would not approve a WEP rating unless a test engine had completed 7 1/2 hours at that rating.
Now if your 250hp engine weighs much over 250lbs then it is of little interest to the aircraft engine makers. The were looking for 1hp per pound of engine weight and could care less about cubic in or liters.
BTW a 2 liter 250hp engine at sea level becomes a 2 liter 125hp engine at just over 21,000ft unless you increase the level of supercharging by a factor of 2.
Assuming the technology scaled up you'd have more HP from anything over 1500 cubic inches than the airframes could handle aerodynamically for the time.
Unfortunately the basic engine operating conditions do not scale well. Small cylinders cool better than big ones, there is more surface area of cylinder wall, piston top and cylinder head to dissipate heat through for the volume of fuel burned than a larger cylinder.
Gasoline only burns so fast, as it was one reason for dual ignition in large aircraft engines was to get flame fronts started in different areas of the cylinder so that the flame fronts would move across the piston and pretty much complete the fuel burn by the time the crankshaft hit about 20 degrees past top dead center and the rest of the pistons travel was pushed by the expanding but already burned gases. Since you can't speed up the rate of combustion much without some really advance combustion chamber shapes or flow patterns (or triple ignition) and since the engine also has to return at least useable cruise performance there is only so much you can do to biases the engine towards the high rpm of the range.
It was these fundamental facts that had Halford (and others) trying to build 16-24 cylinder engines of similar displacement to 12 cylinder engines in order to get high rpm.
You can reduce the reciprocating weights. you can't double the speed of the flame front travel in the cylinder. You might be able to improve cooling with different materials and more coolant volume, for liquid cooled engines, larger coolant passages?, bigger coolant pumps with higher flow rates may not work as the fast moving coolant may not transfer enough heat in the shorter period of time?
Once you hit the HP/WT markers on the engines you can start designing larger offensive payloads or smaller, lighter, less expensive aircraft.
For example, an XP-77 with 1500 HP and same weight would have been an interesting proposition (Although still probably a dead end.)
Unfortunately, what with having to come up with a pretty much a new manufacturing base for most/all of these improvements the aircraft are going to be far from cheap. The smaller and lighter is debatable depending on just which improvements or how much of jump in technology you can accomplish.