Unfortunatly, unless you are able to design with digital signal processors, you will be very limited as to what you can do in a limited space. Here is the problem: Any fx circuits you add will likely have to be of the analog type. These parts will requires some amount of space which means you would have to cut more wood out of the guitar, and analog parts are somewhat large. This becomes a problem because after you cut out too much wood, your guitar starts to sound like poop. Not only this, but with a circuit in your guitar, you would need someway to power it. I suppose you could somehow feed dc onto your cable, but this would also be an external device. I think your best bet, is to go with an external box.
BTW, I made this electric a few years back.