If you want to get a little fancy, you could re-mount the rear fender to the swingarm so that it fits snug against the rear wheel, but travels up and down with it. That way you can keep the suspension where it is, but it will require some creative fabricating.
That's what we are doing with my Roadster project; although that's a totally different kind-a bike. I'm not sure quite what that would look like on a stock Savage, but you might get a cool kind of Soft-tail Bobber look to it....
You would definitely loose the passenger seat, since that sits directly on the rear fender, and there's no frame under there at all. (That really amazed me when we first tore my Savage apart...)