Really there isn't that much worry swapping to another engine in the same family, as long as you keep all the external stuff matching the car. Jezebel can be a bit of a basket case at times since all the bolt-on accessories are Mk II instead of Mk III. Try finding engine mounts at a parts store for that!!
If you can go to a bare engine and then bolt on everything from there, I would totally go for the 1.7... there's no replacement for displacement!!