One thing I don't know is would you run into valve clearance issues with the larger valves on the small bore. Others here can answer that.
A 318 can take a 2.02/1.60 valve set no problem.
(Below, Everyone else who doesn’t know the following)
The issue is valve shrouding which most people seem to make it a kiss of death issue and run to a smaller valve as a savior for this non issue dilemma, and then loose/leave power on the table by a good amount.
While valve shrouding is a power robber, it’s the least of your problems. You’ll have more problems with big lift cams and valve to piston clearance than issue from valve shrouding will ever cause.
You would have to massively lift the valve for any valve to cylinder wall issues. One of the draw backs to a 318 is the small bore size. Unless your in a bore size/CID limited arena somewhere, boring out the teen’s size is a winner on all fronts.
IF! You can bore the 318 60 thousandths, or more…. Go for it as long as the block and cylinder walls sonic check OK for it. The bigger bore is a minor increase in the engines CID but what it does on the otherwise is increase the area for the cylinder head to breathe better. Any cylinder head will flow better on a bigger bore. Bar none.
I always do say a thicker cylinder wall is better than a thin one. However, if you want to get every last bit of what the block/cylinder can do, bigger is better.
And that’s also why you hear the wave of people say get a 340.
If I already have the 318 block, I’m just punching it out as far as practical. If I can get a .090 over bore, I’m doing it. Unless, again, I’m rule limited to a certain CID.