Like I said, VW nut:
83 Rabbit (junked and gone
) Free
84 Gti (no funds to get registered, smogged
) $300 initially (idiot I bought from put $1200 into a head job, the bottom end was completely trashed)
85 Jetta 3sp Auto $400
95 Jetta (daily driver)$500
96 Jetta (mom uses)$200
For sure go to VW vortex forums to see if anyone is doing this sort of thing
, here are some off-the-top of my head ideas that cost under $100
Transmission:
Go to a pull-it-yourself junkyard, they should have a manual 5sp Diesel :
AGS (86-90 1.6 Diesel) 3.94 3.45 1.94 1.29 0.91 0.75
While you are there, snag some output shafts (those cups that the axles connect to) from a 100mm axle car (or the inner CV joints from a 90mm car), and the .71 5th speed from another trans (no need to remove the trans, just pull it in the car!), and a decent looking clutch disk from a 1.8L 8v (smaller splined shaft on cars that aren't 2.0 ABA or 16v, 1.8L have the same size clutch disk otherwise)
According to some quick calcs that will net you ~300rpm drop or more just for that, and they should charge you around $100 for the whole mess. (we have a Pick n Pull brand store around, and all of the ones in CA do 25% off Wednesdays, and 50% off on holidays, like the upcoming memorial weekend).
I wouldn't do any custom machining for something as trivial as a 5th gear swap. You can get $400-700 for the used transmission from your Jetta (1994-1999 right?), maybe more if you know how to wheel and deal, or know a VW nut who needs it for a 1.8t swap into an A1/A2 chassis.
the Gti 5speed is not good for economy, it is a close ratio box, 5th is like 4th in the Jetta box, imagine that on the highway. I did a 5th swap into a close ratio box, it sucked to have such a huge jump in RPMs between 4th-5th.
I have swapped a close ratio with the smaller splines into my moms 96 with a stock 1.8L clutch disk (but it was the 100mm output shafts), and I have run my 84 GTi on a 100mm output flange tranny using Scirocco 16v or Late A1(89-92) Cabriolet axles. Neither of these is exactly what you are looking for though.
Header:
Don't bother with a header, the VW A3 (1994-1999.5) header is a 4-2-1 header already and is a damn good performer, you can't do better for less than $500, and since you want better torque and mileage, you would want one tuned for economy, which they don't make (afaik), it would be a bigger and tuned for higher RPMs, reduced low-end torque, increased high-end HP.
Crank/pistons/short block:
I would seriously keep an eye out for a complete set of 1.6 block stuff for an ABA (Euro/Mexico/Brazil/Canada??), that would really increase the fuel mileage. Double check to see if you are running 185 or 195 tires, if possible investigate 175 tires, that will help with the frictional losses.
The key to all of this is finding a pull-it-yourself yard, they have the best prices. I don't know about swapping parts down to a 1.6/1.7L for an ABA, but the whole short block is typically under $100.
Phenolic Spacer:
A phenolic gasket/spacer for your intake manifold, this prevents the heat from the engine warming up the intake and heating the incoming air, they claim better MPG for this. (I don't know if it is worth it though).
Camshaft/Adjust the timing:
I don't know about a better performing camshaft, but you could pull a late-model cam gear (skinny spokes) from a junk yard and have a machinist cut a couple new keyways in it to retard/advance the cam, giving you a more efficient engine with more torque down low. This shouldn't cost more than $30-50 total.
Bypass AC / Underdrive / Alternator bypass:
Edit, almost forgot, you can get a Vr6 water pump pulley and "A/C bypass kit" belts for $30 from a few places ($27??), when you don't need your AC you can swap it out in about 15mins and reduce the drag on your engine. Smaller alternater, I don't know if there is one, but the VW has a truck-sized battery, I can run mine for 3 days or more with no alternator, even coming back in the dark (no AC running). So if you top charge it at home and use an alternator disconnect switch while doing errands in town you can save some MPG and enjoy increased low-end torque (on the 3sp Jetta I could really feel the power it freed up!). You can always switch it back on if it needs to be on, a Voltmeter is $2-4 at Harbor Freight tool stores, mine works great (I have checked it against the Fluke meters where I used to work), so you could add it to the dash and keep an eye on the volts. A big solar panel on your rear-window deck lid can help keep it topped up (they aren't really worth much, but every little bit helps)
An Aluminum reduction pulley may not be worth it, but it could seriously reduce the drag on the engine from all the accessories. (keeping an eye on the temps and the battery is a good idea if you aren't racing with a reduction pulley). But if you top off the battery at home then it shouldn't be an issue. Why spend gas to charge a battery when the electrical grid is much more efficient and cheaper?
If you want to exercise your arms a little you could ditch the P/S (I wouldn't on the Jetta unless I used 175 tires pulled the AC out and moved the battery to the trunk.)
Daytime Lamps:
You could turn off one of your daytime running lights (they are always on), just like a late-model chevy, or add a daytime Running light and switch off the daytime lights altogether (I think vwvortex may have info on that), or if you live in a bright area (not the mountains), the lights may not even be visible. I think I heard a guy say it is removing one pin will disable them.
Engine Rocking/Wasted motion:
On the subject of wasted energy/motion, I am looking into putting a hockey puck in my front engine mount to reduce the engine rocking. It looks like removing the bottom of the front engine mount from underneath and swapping the rubber puck there with a stiffer/larger spacer will compress the top mount insert a little(soft rubber with lots of holes), reducing the rocking without removing the entire front engine mount. I typically slow down a quarter to a whole block ahead of time and shift into 2nd to slow my car to a near stop, then apply my brake, the reduction in engine rocking should make a huge difference. Too bad I forgot to look for a regulation puck last time I was in town.
Edit 3 (too much already?):
Aero Mods: Mirrors/Antenna:
Remove the passenger side mirror and swap the drivers to a more aerodynamic unit, make up for it by fitting a "rally" style mirror that goes across the entire car in the cab, you will be able to see nearly as easily (perhaps better in the usual VW blind spots
), and the law only requires 2 mirrors, one must be the inside mirror OR the Drivers side mirror. That is CA, I would check your laws.
I think you can cut a piece of plastic to cover that corner where you remove the mirror and use some 3M trim tape to attach it. I have found a very nice black plastic folder at Staples that I used to make a blanking plate for my mom's car because she doesn't have a radio.
I don't know about removing the antenna, but it couldn't hurt, you could swap to an inside one on the dash or rear parcel tray. (Being cheap and strange I might even hook up to the defrost grid during summer :P )