If I recall the spacing was 125mm. You can cold press the steel frames to adjust the spacing. It’s easy to do. There are a few good YouTube videos on the subject. My opinion is yes. You could cold press the spacing down to 110mm. Others might disagree with me. But if you find an old varsity for $35, have some fun with it!
The brakes are the bigger challenge when going to 26inch wheels. I am using 1080 long reach sold by porkchop BMX. You loose a little braking power with the long reach brakes. I did a similar build with a varsity and 26in wheels with a coaster brake. That looks very clean too.
This bike wound up back in my possession. Fun to ride, but I can’t get any stopping power out of the long reach brakes. I found a set of 700c wheels and installed them with original fork and brakes. This is a size too small for me, but I love this set up. Looking for a varsity in my size.