Steve
I think it depends on a couple of things. First, what do you consider "mild"? Second, will this be a street-only car, track-only car, or street-track combo?
If you're building a street-only car and by "mild" you mean 350 to 400 HP or thereabouts, the 016 should be fine. Keep in mind, the 351W is a torque monster, so factor that in as you build the "mild" engine. (Torque is my elixer, not horsepower; that's why I have a 351W! Yes, the plan is street only.)
I went with a Porsche G50-05. In retrospect, if I were to start over, I would go with the Audi 016. It is about 1/3 the price of a G50-0x and should be fine with my planned HP/torque in a street-only car. I think the parts are a bit cheaper, too. (Porsche is pretty much a synonym for $$$.)
If you are building a track-only or street-track combo, I'll have to defer to others on the forum. I would assume for a track car you would be exceeding 400 HP.
I think I would match your transaxle to your engine, not the other way around. Just my opinion.
Eric