You actually happen to have a highly desirable mauser action. It's been used for conversion to all sorts of cartridges including some dangerous gasme cartridges like the 505 Gibbs. It's expensive to do that but to rebarrel to things like .240 Weatherby all the way to .338-06 is not too terribly expensive. Consider a rebarreling

Now to answer your question.....NO...you don't have to remove your rear sight.