There are quite a few old 720K pc dd drives that can work or be modified to work with the A500. More modern hd drives may work as dd drives if they have jumpers and you modify the floppy cable. There are some internet sources on these mods.
As far as tricking out an A500; you can do just about anything with it but the hardware is rare and hard to find for the most part. Still available from Individual Computers and E3B is a cpu socket clockport adapter and USB card (Subway) to add at least USB or a fast serial port (Silversurfer) to the machine. Most harddisk expansions for the A500 came in so-called 'sidecars' that connect to the 86pin expansion connector on the left hand side.
Most accelerators (except the GVP030) connect to the 68K socket inside the A500. The best internal ones are probably either the CSA Derringer (25MHz 68030 & up to 32MB fastram) or the Viper530 (also an 68030 with 32 bit memory simm and IDE).
There is a 2.5" or 3.5" ide adapter made by ICD that fits in the 68K socket and allows an internal IDE harddisk inside the actual case.
More ambitious projects are available on Aminet to make your own Zorro 2 expansion slot or ide interface. You could then even add a Zorro 2 ethernet or graphics card.
Basically, expanding an A500 fully is a lot of work and you're probably better off just expanding the A1200 and using WHDLoad to run A500 games.