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Before you get deep into the mods make sure what you have is solid. I had a 16v car new in 1991 and and was a pretty troublesome thing. I am sure that most of the problems it had could be easily solved now. The VW 16 valves are interference engines and a broken belt costs you a large chunk of your hot rod budget. If you don't know, just change it. Make sure to use all new pullys as well. I had lots of coolant leaks too so make sure all the hoses and outlets are sound. After that I'd start basic and small. Cold air intake, exaust, etc. A prpoer tune up might gain you a little as well. I've not roided a 16v car but I have seen a lot of great mods for them and seen a few go really fast. There are turbo kits, big bore kits, all sorts of stuff. Nuespeed and TechTonics should have alot of goodies for it. And before you get the engine too nasty dont forget to reseach brake upgrades. Good luck and drive safely.
 
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