Given that they were a perfectly adequate machine I'd repair the existing spindle.
On my benchtop mill I have a 10mm EasyChange Endmill holder and a 12mm EasyChange Endmill holder and use ER11 collet chucks on 10mm shanks and ER16 collet chucks on 12mm shanks as tool holders, this gives really quick tool changes and the collet chucks are cheap so it's affordable to have a rack full with tooling loaded.
Check the manufacturer's spec for the spindle bearings, I got rid of a DC motor that ran to 4000rpm and replaced it with a 3 Phase that runs to 7000 without issues.

- Nick