So yeah, saxo vtr stuff will be the way to go I reckon, could be costly though when a gti-6 engine transplant is relatively cheap,
But if you really want to keep that engine then a turbo or a supercharger could make for a good choice, I've not heard of any 1.6 8v turbos in a 306, saxo's/106's yes but not 306's.....might be worth a look...
as styling goes, fitting some phase 2 rear lights are a popular mod, and I think the morrette headlight's (twin headlamps) look fantastic on the phase 1, not so much on the phase 2,
There's still loads I haven't mentioned like stuff about the suspension and handling, any question just ask...