1. Leave the FSB (front sight base) alone. No need to do anything with it. It is fine to have even if you choose to go with a red dot of scope.
2. There are a plethora of good sight options. You need to determine both your budget and sight type (irons, red dot, scope).
Your cheapest option is just a flip-up or fixed style rear sight. It will get you started if that's what you want. It's used in conjunction with you existing front sight block.
You next option is your classic A2 carry handle. Again, it's used with your existing front sight. It's the classic system.
Next is a red dot. There are a bunch of relatively inexpensive quality RDS out there. The Sig Romeo5 and Holosun 403/503 variants are probably the most common of the quality budget red dots. The larger your budget, the more options there are, though truthfully, I'm not thinking anything more expensive is needed for this build. Make sure you get the ones that come with the high mounts designed for an AR. Again, leave the FSB and ignore it when using the red dot. It's not an obstruction and in some cases can be beneficial. A magnifier (generally 3x) can also be added if you want some magnification. They're not my thing though, as the last option is better, IMO. Edit: There are both tube style and open/holographic/reflex style red dot options.
Lastly is a magnified optic. A LPVO (low power variable optic) is quite common (1-4x, 1-6x, etc). There are also lots of options here, ranging from about $150 like the Bushnell AR 223 1-4x, to thousands of dollars. This gives you the best of both worlds. Again, the FSB is fine to leave as when you dial magnification past 1-1.5 it will vanish from view, and can just be ignored at 1x.
Links are just some examples and not necessarily venders you should use.
Shop Magpul Industries MBUS Rear Flip-Up Back Up Sight Gen 2 | Up to 18% Off 4.8 Star Rating on 283 Reviews for Magpul Industries MBUS Rear Flip-Up Back Up Sight Gen 2...
www.opticsplanet.com
Amazon product ASIN B07T9GK7SRView: https://www.amazon.com/Sig-Sauer-SOR50000-Romeo5-Compact/dp/B07T9GK7SR/ref=sr_1_1?crid=24D9GXXM4T2QN&dchild=1&keywords=sig+romeo+5&qid=1614045406&s=sporting-goods&sprefix=sig+rome%2Csporting%2C195&sr=1-1
Amazon product ASIN B01BJ3ZXD0View: https://www.amazon.com/Holosun-HS403B-Micro-Red-Optic/dp/B01BJ3ZXD0/ref=sr_1_7?dchild=1&keywords=holosun+503&qid=1614045438&s=sporting-goods&sr=1-7
Amazon product ASIN B079HQH4P3View: https://www.amazon.com/Bushnell-Optics-1-4x24-Drop-Zone/dp/B079HQH4P3/ref=pd_lpo_200_t_0/140-4155827-1278001?_encoding=UTF8&pd_rd_i=B079HQH4P3&pd_rd_r=d774c55c-321e-4f62-a1bb-f6d17439779f&pd_rd_w=LItHi&pd_rd_wg=XQT7z&pf_rd_p=16b28406-aa34-451d-8a2e-b3930ada000c&pf_rd_r=WETG5BMKV64696BVP2CM&psc=1&refRID=WETG5BMKV64696BVP2CM