Think you've made a lot of good points from your road test that I've experienced in my first week of M-lite ownership.
The GTI will be a more practical car in the long run, especially if you have a family as the rear room is limited. The M will cost more to own, but I don't think it will be THAT much more. If you want to be sensible 35mpg is achievable and more if you have the auto-box. Tyres will last 10k-15k tops and the rears are about £175 per corner :-s
Don't agree on the depreciation front, its a BMW and will hold its value pretty well as long as its looked after. In my experience, the type of people who rag cars to death certainly don't pay £30k for the pleasure or they have more money than sense!
On the looks side, I've not had one bad comment yet and everyone loves the Estoril blue, but I do appreciate its subjective.
Glad you had a test drive though to see for yourself the performance is on another level to the GTI, no comparison at all.
Personally, I would have ended up modding the GTI as it should have a bit more oomph, and I bet there will be a fair few people on here who go down that route when the software is available. Not once have I thought the that I need more craziness in the M135i after 500 miles.
Both great cars probably aimed at different people, I kind of fall in between the segments as I don't have a family and am willing to justify the extra cost in place of smiles per gallon!
If your not sold straight away its definitely not the car for you though.