There's a lot more to tracking than out right power. If you're looking to be the fastest down the straight aways, then yes power is important. I had a friend with an e36 318is with down force and group n suspension that would turn a minute 45 or quicker around Mosport with street tires. A stock e36 M3 will run approx a minute 43. So in the turns that M42 was smoking the M3 but in the straights the M3 was getting it back. Just an example to point out how vague your question is. Also, do you have the budget to keep your E46 maintained for the street and run an E36 with all of the go faster goodies you will inevitably want to put on?
IMO, get an E36 M3 and leave it stock and don't worry about having the quickest car, if you know how to, or learn how to drive the wheels off of it, it is not that much different than a stock E46 M3 around tighter tracks like Cayuga, Shannonvile, or Mosport DDT. You'll only notice the power deficiency at big tracks like the Mosport GP.
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