When I saw the name of this thread I thought, "My advice is get a real banjo." Jokingly, of course ... but maybe a little serious.

Your feeling that the lower strings detract from the sound is absolutely right on. A guitar just doesn't sound all that good as a banjo ... especially at the low end.

BUT this is the instrument you have been given and you want to know how to make it sound the best you can. I think you're on the right track in your thinking.

Rather then try to put a high 5th string on the lower ones, you might consider trying a Nashville tuning on the whole instrument, that is use thinner strings for the lower four, and tune them an octave higher. You might tune D to D or even C to C - rather then E to E - OR you could use an open tuning like DADGAD or VESTAPOL.

BUT, experimenting with high tuned strings on the low end of the guitar may well make the most of your new instrument.

Good luck. It sounds like fun!