Definitely a keep and well worth doing mate! There's a whole range of engine swaps that are common, the main ones being a 1.8 20 valve turbo engine from a mk4 Golf GTI, a 2.8 VR6 engine from a mk3 Golf VR6 or putting something like a mk2 Golf GTI 16V engine and gearbox in.
I've just taken on a 1991 Golf Driver which I'm working on, check out my build thread if you need some ideas, I'm modifying the current 1.6 litre engine for some fun but I plan to do a fair amount of work with the running gear to improve it.