You need boost if you want a chance in hell. I'd probably boost the 2.5L you have just for the sake of cost/reward.
Swapping a M3 motor in your car will likely cost at least 5K in labour plus the cost of labour (assuming its even possible, which i'm not saying it is)
Hot: 2001 Estoril M Roadster
ZCP 19's, ZHP knob, JL 8W3
Cold: 2002 TiAg M3 6mt
ZCP 19's supersports, ZHP knob, UUC short shift GROM, OEM 18's w310's,
http://absolutehid.ca hid kit