Hi Tony,
Sounds like you're doing something very similar to what I have been doing. I bought a Mk2 GTI as a donor car for my Mk1 that needed a replacement engine and gearbox.
I have been told that you can fit the Mk2 dash into a Mk1........wish I had known that before I chucked out my Mk2 dash.
The front seats definately fit.......I've done it. Not sure about the rear.
The engine swapped over fine, same block and similar head. Just had to keep the original Mk1 inlet/exhaust manifolds and injection system. I believe you can convert the injection system to the Mk2 layout but its not easy and thereis little to be gained.
Let me know how you get on with the discs........I kept the rear brake system off the Mk2 with a view to doing exactly this in the future.
Hope that helps..........oh and welcome to the forum.