I think a better idea might be that kabuto is replaced by itachi when you reach higher ranks. (i.e. master hokage) If you think about it kabuto is no where near the hokage level so itachi would be a better idea. It may go something like this...
when you enter the cave to fight kabuto, you see his bloody corpse on the ground. Out of the shadows, Itachi emerges. He has killed Kabuto and now has the radioactive crystal in his hands! You know this will be tougher then any fight you have had before.
That should be the opening paragraph. Also as for his stats, I think he should have over 1000 hp and good attack and fair defense. As for rewards, just about the same stuff you get from kabuto but a little bit higher. Maybe around 2000 gold and 1.5k exp.