my jetta came with a 1.6 NA originally, and when i got it it had the same issue where it wouldn't go any faster than 120 km/h, and that was REALLY pushing it
the transmission was a 7A
i assumed it was just the fact that the motor made so little power that it couldn't push it any faster than that, so i left it and just kept it at 110 so it wasn't working too hard (speedo said 110, actual speed was more like 95)
last winter i swapped in a 1.6 TD, and it makes some pretty damn good power, but it still has the same top speed
even at it's max speed, the motor is making gobs of power, i can accelerate quickly and hold speed up hill, etc, but it still won't go any faster
and even when i shift into 5th, all it really feels like is another 4th gear, sometimes if i'm not thinking i even try to shift it into a 6th gear, because it feels like i should be going a lot faster
anyways, i'm pretty sure the problem is the transmission and either the 5th gear was swapped with something else at some point, or the final drive is messed up, or the differential is weird and isn't connecting completely
the clutch is brand new and is adjusted properly, holds power just fine, so i don't think it's slipping
at any rate, i'm swapping in an FN soon, and hopefully that will fix the problem
it may be your problem, too