Questions about head work.

If that is a picture of your intake ports now, you are correct insofar as the larger valves provided approximately zero power gain. The area under the valve seat should be opened up and blended to the diameter of the seat (bowl blend). I'm unsure what the author in whatever book you are reading means by "venturi" within an intake port, but it sounds like he is confused. A venturi creates a differential in gas pressure by a restriction in flow. The area directly under a valve is the place within an intake port where you least want restriction.

A "wet runner" intake, as found in a carburetted engine prefers a steady and reasonably high velocity throughout the intake tract to keep the atomized fuel in suspension. Too large a port can cause gas velocity to slow or stagnate allowing fuel to condense out of suspension adversely affecting low RPM throttle response. A set of W2 heads on an otherwise stock 318 would likely produce only modest power gains, but could make the engine rather doggy at part throttle. A "dry runner" intake system, like the port injected Magnum 318 can tolerate a far larger port because the fuel is atomized near the end of the intake tract rather than at the beginning.

By this authors apparent reasoning, it would be beneficial to have a smaller restrictive point at the end of of a large port. In this model, gas velocity would certainly be highest at the valve, but it would be slower throughout the port upstream. I contend this is exactly the opposite of the ideal, giving all the power restriction of a small valve with the response liabilities of a large port. In my opinion a reasonably sized, constant cross section port with a large, less restrictive valve will be better.

Fitting 1.88 intake valves, with the associated port work, is a worthwhile upgrade to 318 heads. However 1.60 exhaust valves should also be fitted and similar attention should be payed to the exhaust ports. In fact the larger exhaust valve would be of more benefit if only one set of valves were to be upgraded.

Regarding your Teflon guide seals. Yes, the guides can be cut down to allow these to be fitted. A specific cutter is made for this task and is reasonably priced. Also, many aftermarket bronze guides are pre-machined for such seals. But honestly, the factory style Viton rubber "umbrella" type seals work well, cost less, fit under any reasonable spring and require no additional machining.