E46 Transmission can handle 100+hp. The stock clutch can not. If you keep the clutch stock, just go easy on it. Stock rear end is strong too. It does not have an LSD, and it was never an option on non-M E46's.

Tuning is going to be the downfall. Nobody has truly cracked the E46 DME (BMW's version of an ECU). There are a few big shops that can tune it, but it is REALLY expansive. Most BMW owners just opt for various bolt on kits that come with a reprogrammed ECU.

There is no bolt on turbo kit for the M54B25 motor in your car. There is a bolt on kit for the M54B30 found in the E46 330's, but nothing for the smaller motor found in the 325. Your only bolt on kits for the 325 are supercharged. There are (2) centrifugal kits (I believe), and one roots supercharger kit.

Camber those wheels, and you are on to something.