Yes, modern cars are faster than older cars, plain and simple.
Now keep in mind him having a 98 Mustang GT isn't anything to run home about. The reason Ford was so quick to upgrade that motor (after just 3 years) is because it sucked so badly performance wise. The car was rated at 215-225 bhp and 290 tq, however failed to perform on the same levels as the outgoing 5.0 as the 5.0 could run high 14s 1/4 mile with experienced drivers while the modular 4.6 failed to crack into the 14s. An average driver with a 96-98 Mustang will run a mid 15s to low 16s 1/4 mile, which yes, es EXTREMELY SLOW for a V8.
However if your friend wants he can do a PI swap from a 99-04 Mustang. There are a lot of trashed and wrecked 99-04s around the country, I'm sure it wouldn't be too hard to find the top end off a 99-04 and swap it out following the write up in the 4.6L tech section which would boost him to around 225 rwhp and mid 14s quarter mile times.
Serenity 08 Mustang GT - 295 RWHP, 315 TQ
Shelly 11 Mustang V6 - 270 RWHP, 260 TQ
95 Mustang 5.0 - N/A 250 RWHP, 275 TQ; S/C 400 RWHP, 400 TQ (sold)
99 Mustang SVT Cobra - 280 RWHP, 290 TQ (sold)
97 Mustang GT - 190 RWHP, 250 TQ (sold)
00 Mustang V6 - 145 RWHP, 184 TQ (sold)
98 Mustang V6 - 125 RWHP, 210 TQ (sold)