Alright mate, welcome to the forum! Instead of thinking engine, you could think of suspension instead. Make the car more fun to drive. Lower it, strut braces, anti-roll bars will all help. If you really want to mod the car further... look towards taking parts from the 106 GTi, possibly the engine as well!
However, I personally would save my money for the car you buy and mod that instead! The choice is yours mate. If you do decide on modding the Pug then we'll all be happy to help. If you don't want to mod the Pug then join in with the discussions we have on here and start learning now. You'll be suprised how long it can take to fully research ideas.