I had no idea they were making those in 27.5" now. You may want to look at the classifieds here, as well as other sites, craigslist, etc and look for a crankset that comes with an external bearing BB. Maybe even an ISIS BB.
I'm sure you could go with another square taper BB with a shorter spindle, but it may alter your chainline and tinker with your front derailleur. You may also need to buy chainline spacers if your smallest chainring touches the swingarm.
Personally, I don't think it's worth spending money on that particular bike (unless you already bent that spindle). There are plenty of used bikes out there that out spec that Wally World bike for probably a similar amount of money it would take to upgrade that thing
My advice is ride the crap out of it and only spend money as needed. Save any "upgrade" money for something better... or something different... doesn't have to be mtb related.