right the cvh is probably smoking due to worn valve stem seals, not that big a job, but it could also be piston rings or bores if there is constant smoke at higher revs. not worth fixing really.
as for engine transplant, an rs turbo, rs2000 engine are going to be a lot of hassle and money to fit and get running on your saph.
if i was you, i would source an xr4i and swap the engine, loom, petrol tank, gearbox, etc. straight swap, and a lot more fun than the shonky 1.8.
best thing is there are lots of tuning parts still easily available for the 2.8/9. stick with RWD lots more fun than 4WD