You'll never make a RM125 road-legal in PA. PA law is pretty explicit that anything with an off-road MSO will not be titled for road use, period. So I'd suggest you just give up on this idea right now.
As for KTM not being "name brand," your father is sorely mistaken on that front. KTM is every bit as large and stable a company as anything coming out of Japan Inc. They also have a significant dealer presence in the USA, in addition to the biggest dual-sport model line in the USA. In other words, not only are they "name brand," but they're the best "name brand" for the type of bike you want to purchase.