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Swaps are wasting your time. The ALH TDI is a proven engine good for 600k miles with regular maintenance. Yes a great motor even in commercial use. Take it out of service once a year for required fixes and it will treat you to excellent service. The cars are good too, mk4 chassis VW again no problem with 600k miles if you keep up on the fixes and what needs to be done. Simple cars too.
Putting the ALH into something else is not only a technical challenge but you are also considering putting it into cars that normally do not last as long as the original vehicle. Rust is mostly the issue. Parts support another issue few think of in the long run, Japanese discontinue parts support long before the Germans do. There is also a greater community and car shows/swap meets to find stuff with German cars.
Another issue, vibration. I doubt the hybrid system will work for long dealing with the diesel vibrations. Meaning it could be done, but in 5 years the issues will be known.
Vw has a pretty good package in the 99-03 Golf and Jetta. I have several, wrenched on them for years professionally, do swap meets, we still have our 2000 we bought new and now at 400k miles. It was in daily service for 17 years before we replaced it and extremely reliable. If you go manual trans the fuel economy is very hard to beat and there is power when needed.
If you want an easy project find a mk1 Rabbit, 2000 lbs, hatchback and easy to engine swap any diesel into from the 80s to 1998. The ALH can go in, but requires some parts to make it fit (mounts). Or for a bigger car perhaps a Dasher wagon or Quantum. But those earlier cars need more constant love and maybe too much for commercial use.
My personal experience is Toyota and Honda have great cars as is, you drive them as long as you can without fixing them, never fall in love and move on when they start failing, and typically it all happens at once. About 8-10 years in regardless of miles. You see the same ones in the junkyard, all the same model year, all the same rust. Interiors never hold up well, exhaust falling off. You can pile up the miles quickly in them, but forget about keeping them 20 years. Vw will have minor issues but spread over the life not that bad, everything holds up very well.
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