318 heads are more than capable to make the power you want but so are 360 heads with the right cr, there's no overly wrong choice, 360 heads will need less cam to make same power as the 318 heads or more power (probably 30-40 ish hp) with the same cam.
It's up to you, since your rebuilding I'd probably go with something like KB piston's zero deck it and do the 360 heads, that way the engine has room for growth.