^no, that's a fair concern...it's always tough when you aren't quite so mechanically inclined and don't have a mechanic that you can trust...
the first thing that I would do in your situation is go through your yellowpages or whatever you have locally to find some local mechanics specializing in toyotas or imports...then pay them a visit and talk with them. don't tell them what the dealership told you, and just see if they come up with the same diagnosis, or more. if they come up with more, then chances are they are trying to screw you, since the dealership will mention literally everything possibly needed to make money
then compare their price as well. it should be 3/4 of what the dealership quoted you if not less than that. also, ask them why it costs so much and if they are trustworthy, they will usually describe the basic procedure to you. if there are doubts, then come back and ask us if what he said was right or not.
as for an engine swap- it's fairly simple when you get an engine from the exact same car that you have (
www.car-part.com - best place to look, and you can specify exactly what year you want, etc). I'm not sure how long a shop will take to do it, but from experience, I can say that a direct drop in can be done in 1 day by somebody who has dealt with that particular engine before.