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)
I run a canadian led kit & hid kit company, if you have any questions about led headlights or hid kits in canada or would like to check out our products please contact me here: http://absolutehid.ca
Hot: 2001 Estoril M RoadsterZCP 19's michelin supersports, ZHP knob, JL 8W3
Cold: 2002 TiAg M3 6mt
deoranged, dechromed, led tails, ZHP knob, UUC SS v3, GROM, OEM 18's w310's,
Fun: 2006 YZF-R6, black, ohlins, pazzo, cat delete, vance hines csone, YEC racing tune