You have 2 options.
1. Create a copy, migrate to 5.0 and delete the unwanted projects
2. Export as XML from current instance and import only selected projects to the new environment running same version and then upgrade it. In this case, you will have to manually create the configurations needed for the project.
Sorry; I meant all the issues assigned to a certain project would have to be moved by the method you state above. I think I may have answered my own question though as you state to export in XML and delete what you don't want -- I'm assuming the XML also contains the issues as well as the projects.
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