alright mate. i had the same probs when i first brought a golf. i had a 16v and wrote it off the brought an 8v. the 8v is so much more fun to drive. the response and torque lower down and in the mid range is much better and like you say the only real difference in the 16v is top end but with a few mods to the 8v wont be no different.
I got the late digifant with the electrics and power steering. there well good. go with the 8v, u know u want to, think of that torque, plus with the digifant u dont have to worry bout porting and polishing etc. plus the digifant, stick a gurth exhaust on it and u can do some brill back fires!!!!!!!

If the 8v is/was so good - why do a 16v?
The 16v is an altogether better car.
Quoting from VW Motoring Feb87 who test drove the New Mk2 16v:
This [8v Mk2 GTI] increased the power to 112 bhp and the torque to 109lbf ft (as opposed to 110 bhp and 102lbf ft for the 1600).
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In terms of bhp, the 16v produces 139 at 6,100rpm as opposed to the 8valves 112bhp at 5,500.
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More importantly [the 16v] between 2,800 rpm and 6,100 the torque never drops below 118lbf ft.
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So this is quite clear - the 16v develops more torque at 2800 rpm than the 8v does at any point on the rev range. So all this that the 8v is better lower down is RUBBISH.
As for the some of differences, the suspension and brakes are but to name a few items that got changed.
Mod'ing a car and comparing it to a non modified car is quite pointless. Its totally unfair comparison that has no boundaries.
Tin