Sorry - just spotted your post - I think you have made the right decision. I don't know about the 1.8s (I have a 98 diesel) but have read heaps about their heating and engine failure problems - the other issue is that 98/99 models also have catastrophic drive train failures as well - the vicscous couplings fail and then cause the IRD to fail - if it is going to happen it will occur when travelling at high speed on high grip surfaces - eg long distances on freeways. Seems to happen when the cars are 100,000 - 150,000km old ie about 72,000miles. This happened to me recently - 120kph on a high grip concrete expressway - about 100km along - bang - car no work - tow away!!
Just think if both happened - the repair bill would exceed the value of the car.
Good choice - go in the VW and save your relationship
Garry
