I think you can break things down to can't, could, should and must. Let start with the PSU. You say "the larger size", I will assume you mean the mini-tower which is the largest size of the four versions: Mini-Tower (MT), DeskTop (DT), Small Form Factor (SFF) and Ultra Small Form Factor (USFF). FYI, here is the tech guide
https://www.dell.com/downloads/global/products/optix/en/opti_755_techspecs.pdf
Page 28 of the guide shows the MT ships with a 305W and looks to be 264W on the 12V. PSU is of questionable origin, it appears that Dell has sourced a variety PSU manufacturers
http://www.stuartconnections.com/3103-thickbox/Dell-Optiplex-755-Dimension-E520-MiniTower-305-Watt-Power-Supply-NH493.jpg
http://www.stuartconnections.com/8371-thickbox/Dell-Optiplex-320-755-Dimension-E520-MiniTower-305-W-PSU-Power-Supply-XK215-NPS305KB.jpg
http://data.stuartconnections.com/object/image?p=8794&i=2
This will be a cheap, poor quality PSU which will not support much of a build. FYI, as power supplies age they lose capacity, especially if components like capacitors are cheap. If this thing is more than 5 years old your 264W might be closer to 210W. Also it only comes with a
- 24-pin ATX mainboard power
- 4-pin ATX mainboard power
- 4-pin Berg Floppy
- and four 15-pin serial ATA (SATA) power connectors.
http://www.stuartconnections.com/en/power-supplies/5556-Dell-Optiplex-755-Dimension-E520-MiniTower-305-Watt-Power-Supply-C248C.html
There are no PCI-e connectors for running video cards. For these reasons you should replace it and you might have to if you require a GPU 6 or 8 pin PCI-e connection.
The case appears to be an issue as well, I believe that this is a picture of the back
http://www.stuartconnections.com/5627-thickbox/Dell-Optiplex-755-Mini-Tower-System-w-Core-2-Duo-E8400-30GHz-2Gb-Ram-DVDROM.jpg
Note the location of knock-out slots for expansion cards, only a single slot is available for the GPU and thus you would be restricted to single slot cards only. This severely limits your options for GPU's. It also appears that the opening for the mobo connectors is an odd size/shape but I can't tell for sure. Top mount for PSU, okay but not optimal, bottom mount is now the standard. The motherboard does appear to be micro-ATX
http://www.pc-specs.com/mobo/Dell/Dell_GM819/3322
but I don't see any other mounting holes in the case so you would be restricted to a micro-ATX replacement mobo. Must you replace it, maybe not. But for the hassles you will face in trying to use this I would just get a good budget case and be done with it. You will get better space/cable management and thus better air flow/heat management.