bought a 2001 civic a couple of years ago for like 2200 bucks for my sister and drove it to NS. Changed the plugs once and did the oil.
Could probably get a solid accord within your budget as well, don't think it'd be worth stretching for an 8th gen civic but they're solid cars, more efficient and chain driven.
2L 8V VW is going to use another 1.5-2L/100, be just as slow, probably run into valve seal issues before 300k, and have general mk4 problems. Far from the worst option but realistically they're not as reliable as honda/toyota
Thing with a honda or toyota is that you don't need to learn all the weird quirks like on a VW, it's just going to work. Pretty well all maintenance is cheaper, parts are cheaper, and shops are more willing to work on them. I'm a VW guy thru and thru and don't think I'll own a honda
but there's no way I'd gamble a relationship with an automatic mk4