i do this type of work quite alot at work...
it goes without saying that normal mk1 brakes are pretty poor at best, looking at your list i would say that a 16v servo and master cylinder would be the first thing to change... get the 16v servo from the breakers and get a NEW master cylinder from gsf or vw, old ones are a waste of time. (your need a new brake fluid reservoir as well)
my knowledge is limited on 16v front brakes on a mk1 as ive always put g60's on them!, i know some Audi calipers fit straight on but unsure if normal 16v ones do, i know mk2 8v gti ones do, so possibly yes... sure one of the lads on here will know..
the drum brakes on mk1s are pretty poor even with new shoes, if you want better rear brakes put a mk2 rear beam on the car, then you can have disc brakes

, if its 2 much work then make sure the shoes are new..
as for the handling setup, i would replace the cv joint housing if they look a bit ropey, if theres not a noticeable problem with the ball joints or tie rods then leave them. check the wishbones for any bow they might have and replace them if so. changing the bushes is always a great plus, there a pain to change but its worth it!

, get a lower and upper front strut brace as well for sure!
if you need any part numbers then pm me and i'll give them 2 ya!