Horsepower with mileage options

I would agree with the 3.55 gear ratio being a good balance for getting the best of low end off the line with a balance of it drinking fuel. Provided of course a lighter foot on the pedal, accompanied with a 4bbl carb and intake combo, 258-268ish cam, dual exhaust, and an od transmission would get it in the range of a semi economical rompity car.

I definitely think handling should be on the list of improvements.
There's a lot of threads about 318 cams here on FABO. For mileage and efficiency you should keep the duration at 220° or below. Much more than that and you may need a higher stall torque converter to make it work. Here's a couple threads I saved. Within this thread are links to other 318/cam threads. 318 Build on a small budget

Here's another: 318 build with XE268 AND 302 heads