360 pros & cons vs 318

couldn't you balance it out with gear choice ?
yes and no
You can equalize the output in the low rpm with gears but then what happens at peak torque and beyond.......
But that's my point exactly.
If cruising comfortably on the hiway is important to you, and overdrive is not in your budget or on the table, you kindof have to limit your gears.
For 65mph with 27"tires; 3.23s= 2600, 2.94s=2370
And for Rapid Transit off the line; that puts the 318 in the outhouse, and the 340 into the doghouse; unless the TC is cranked up, and you can't go too far with that, and even if you do, the smaller rear gears just don't spool up right. And worst of all you have two other bases to hit,namely ; the 3-2 Kickdown at 55mph to safely pass a slowpoke, and the 2-1 kickdown at 32 mph to blowby grampa on Sunday morning.

As to;the 2-1 KD@32mph
you want to be near but above the torque peak, so the tires will lite up, but not so high as to force a 1-2 upshift right away. I like about an 8/1 first gear ratio for this with a 360, so with a 904, that is a minimum rear gear of 3.23 to get about 3150 @ zeroslip/maybe 4100 at 1.3TC-ratio at WOT. Each smaller engine is gonna want the next bigger rear gear, so a 340 might like 3.55s and a 318 might like 3.91s.Of course with 3.91s, your Rs at 32 are 3800@zeroslip/perhaps 4940 at 1.3 slip. And you know the stock 318 is about ready to shift .... so that ain't gonna fly.

As to passing at 55 on the 3-2 downshift;
the 360 with 3.23s is gonna be at 3200@zeroslip, perhaps 3840 @1.2 TC-ratio, about perfect, and by 70 to complete the pass, she might be at 4900 still at 1.2 ratio.
But the poor 318, stuck with 3.91s will hit 55 at ~4650 just about peak power, and by 70 is well past it's prime at 5900, so again, 3.91s are a lousy passing-gear for a stock 318.

This is why,with an automatic, I like the 360 ; it hits all 4 bases with 3.23s.
Put a small spread-bore carb on it so it doesn't blow the tires away in first gear, and you'll never be sorry you chose it.
Pump up the cylinder pressure and it can equal the best smoggerteen for fuel mileage.
Put a lil cam in it and it turns into an animal.
And it does it all with a modest TC and 3.23s.

For those that don't know, for an automatic-equipped car, and in most important to me order, my bases are;
1) Part-Throttle Second gear pull
2) 2-1 kickdown at 32mph
3) cruise rpm
4) 3-2 kickdown at 55 mph
5) take off from zero mph

With a 904, 3.23s are about the best gear to hit them all, but with a stock-type TC, it takes a 360 to pull it off. Forget the smogger318; comparatively speaking, with 3.23s and a 2000/usually less TC, it is dead in the water,
Both stockers; an early hi-compression 340 will compare well with a 360.
But if you pump up the 360, to 340 compression status, it will match the 340 with less cam; and with a 340 cam, will annihilate the 340 on every point.

Of course if you give the 318 some decent compression,usually requiring closed-chamber aluminum heads, a modest solid lifter cam, an A999 with a higher but still modest stall TC; you can make a really nice performer out of it. The A999 will act like a 5 speed; with an automatically adjusting hi/lo ratio in each gear, plus the lock-up feature. And you can do it all with a 3.23 ..
Yes, the 318 will like a 5-speed manual if you insist on a m/t, but then the ratios will need to be re-evaluated.
IMO
A purpose-built 340automatic could be adequate on all 5 points, still with 3.23s ......
but do you want/will you be satisfied with, adequate?