Recc for extra Reliable micro-ATX mobo/CPU/PSU upgr. <=$300 ?

Hi,

Sister's 6 year old consumer micro ATX PC - mobo (with integrated video), has passed away. Used lightly for office applications and web.

Can anyone recommend a very stable micro-ATX motherboard/RAM/CPU/PSU "upgrade" that can be put together to revive this machine, that would be steady and reliable - for less than the $300 total a new ultra-basic consumer system would run?
 
The PSU can be near ATX size (current is tight at 3.5x5.5x5.9 inches) (case only vents out back)
 
Intel or AMD, 2012 older/slower and reliable should be better than the 2006 components being replaced. (So we're not talking high end Phenom IIs or i7s.) Hoping that upgrade $ value would make a better machine than buying a whole new one, or even save money.

Looking for some direction. And minimal future problems. I'm a newbie and am lost with trying to determine reliability from Newegg reviews (seems like many mobos and PSUs are 2/3 5* and 1/3 1* )

Thanks.
 
PS Do the newer Intel CPUs listed with "HD" mean no video card or on-board chipset is necessary ?