I've been reading a bit on the differences and people tend to say, alot, that 305's have better breathing in relation to the 350 up top. 350's fall on their face at 4500 or so and 305's fall at around 5,000. Is this true?

My other question is if someone were to look at a dyno graph of a stock TPI car, could they tell if it were a weak running 350 or a strong 305 based purely on the curve?

Assuming both are TPI, I'd say it's probably true...given that they're both breathing thru the same TB, runners, and plenum. The 350 can't move enough air thru these restrictions, whereas they're not quite as much a limitation on the smaller 305.

With that said, the 350 is still making more power while it's falling off past peak than the 305.

A 350 really doesn't fall on its face compared to a 305. It just doesn't breath as well since the TPI intake was designed for the 305. It's like a skinny kid running flat out with a 50 lb back pack, it may not take off the line quick, but it could prob run pretty fast flat out, vs a fat kid with that same back pack, it has enough energy and power the plow out of the hole, but runs out of breath sooner. Even if the 350 doesn't make more power than a 305 at 4500 rpm, it still has it beat by 50 ft lbs tq.

What about the 305 only having a 3.740" bore and having less mass to move? Could that play a role (including the required 305 cfm) in having alittle more rpms?

Nice analogy

The mass of the 305 short block would allow it to spin up faster but it wouldn't affect where it stops making power. Inertia.

Less mass has alot to do with how a 305 can rev. At 6,000 rpm the crank is turning 100 times in 1 second. That means the piston moves up the bore in 1/200th of a second and back down 1/200th of a second. That makes 1/100th of a second. The pistons are alot lighter as well as the counter weights. The counter weights don't change directions but the pistons do.

And to add to that excellent description of the potential of a smaller bore engine... there is another consideration and that is mass air flow. At Xrpm a smaller engine is going to be pulling less volume per cycle hence more mass can get through the port at that RPM and with more RPM there is more HP (same air flow).
That's why HP is in the heads/intake/exhaust, cam is built around the vehicle's purpose, gears, tires, and weight. But the heads unlock the power, not displacement! More air in, more horsepower out, it doesn't matter if you've got a huge displacement engine. Put itty bitty 305 heads on it and the only thing you'll have done is lower the peak power RPM, the actual power number doesn't change much.

Then how many more RPMs can an Lb9 have from, say, Al. vette heads?