The 2.0 isn't much faster than the 1.6 speaking from experience (simple drag start from lights and test driving it)
However, by owning a Golf mk4, you are subject to the anti-golf sayers on here who advises you to get a mondeo/focus/clio over a golf in any shape or form.
I agree that they weigh lots and mpg can be poor (mine is average 29mpg with big wheels!), however I don't think they are any more bland than a focus and also look quite smart.
I own a Diamond black 1.6SE 16valve X reg Golf.
The SE package comes with Aircon, cup holders, CD player, electric windows all round (safetys on the back 2) and things like heater mirrors. I am sure you get more for your money on a Focus however.
Mods that are seriously worth considering:
Alloys - the hubs are horrible (think you have those covered though?)
Back lights - the Tango lights date it, get some GTI ones on there. (£80tops)
Clear side clusters - again, the orange ones are dated. (£10?)
Nice Headunit - The stock speakers are really punchy for standard, so a headunit sorted me out just fine. (£170 pioneer)
Costs:
Changed Cambelt/Timing belts at 40,000 miles (~£330)
Service including oil changes and brake fluids (~£130)
Problems:
-Gearbox is worth checking as said previously as all 98-00 golfs need to have a bolt kit added so they don't fall apart (Chocolate gearbox)
Rear left light can keep going dim or not working due to the rear wiper fluid cable leaking on the electrics.
-Rear bushes weak at that mileage - get them checked
-Engine mounts can weaken after 80,000
-Knocking noises from the front mean the alloys haven't been fitted properly - found this with stock GTI alloys from dealer.
Motorway driving can be good for comfort ( I travel regularly up to 200-300 miles and its fine) and the engine is much quieter than the Company Mini that I sometimes use. However things get noisy in 5th gear above 70ish, but I am always listening to music! Generally the engine is very quite, I usually have to look at the rev counter to double check!
Excuse the bad bad photography!
I really like mine, though it does leave me wanting more from the car - But there isn't much you can do to a 1.6 engine, so just waiting for something more interesting! It is seriously worth saving the extra for the 1.8T golf, as you can remap and also have a fairly decent engine to work with.
If you want any info on the mods I have done or examples of the difference it made, I have lots of photo to show how much different the car can look from base stock parts!