Squareback's are Mk2, Mk3 Polo's are the coupe's (more rounded) and Mk4 are the 6N chassis (from about L reg onwards).
I did have a Mk2 Squareback, and now have a Mk4 1.4.
The Mk4 1.4 16v engine gives about 100bhp without mods.
I have to admit that I haven't seen many Squarebacks with anything wilder than a G40 conversion.
I think it's something to do with the fact that to run a big engine in there, the running gear would need swapping and chopping to fit into a narrow polo.
Always fancied a VR6 in my Mk2 Polo with old skool 13inch rims. Real sleeper.