I'm a huge fan of Tiaras, great boats. I am hazarding a guess, but I would bet that Merc Bravo 1 bellhousing/transom assy/drives would be less than the Volvo setup. Certainly less than $15k per side in parts. As you mentioned, there are a lot of ancillary systems that might need to be swapped or modified which would add to the cost. I'm thinking stuff like exhaust, shift cables, etc. Since it's an older boat that stuff might be due for replacement anyway so a wash either way.
I don't think there is a silver bullet solution to completely refit your boat that makes financial sense. The most cost-effective thing to do would be to find another Tiara (or whatever) that has already been refreshed. Good boats at firesale prices are still floating around out there, maybe not as many as a couple of years ago but definitely available if you look hard enough. Since we're knucklehead boaters and this hobby doesn't make financial sense anyway, it might be worth it to you to give a second life to your family boat. Knowing the history of the boat and emotional attachment have a value, just need to figure out what that is to you.
There are smart guys on here that can give better technical answers on the ins and outs of swapping Volvo to Merc, that isn't exactly unheard of in the Donzi community. Good luck.
"Speed's fine, but accuracy is final."
- Bill Jordan
1998 Donzi 21LXR
1971 Boston Whaler 13