You really can't feasibly make it faster without sacrificing fuel economy, dude. Speed costs money, how fast you wanna go? Without looking at the engine, I really couldn't tell you what you have, but beetles in those years definitely did not come with 1700cc out of the factory, so it's either a modded engine or a bs artist (possibly both). If you could grab the engine serial from the crankcase (by the support flange for the generator (possibly alternator), i could tell you what you have. Also, what do you mean by "rusty"? Is there surface rust on the exhaust or are there actually holes in it? The surface rust won't make a difference, but the holes certainly would. That said, with those old beetles, there's quite a bit you can do to make them go faster. You can switch out the intake and set it up for dual carbs and put a gnarly set of big webbers or dellortos on it, you can swap out the pistons and cylinders for a big bore kit (make sure to upgrade your oil cooling system), you can set it up for a hot cam, and it you don't mind rebuilding engines and spending lots of time and money making it work, you can turbo or super charge it.The first few things I listed are best done together, and if you decide to turbo it, you should pretty much build the engine from the ground up if you want to do it right. keep in mind that the stock transaxle is quite weak in those cars, if you want to drive it for any length of time at all, you'd be wise to swap a type 2 transaxle into it. All of this is just the tip of the iceberg, and I am by no means an expert. For the record, very few vw owners swap a wrx motor into their cars, as it is a liquid cooled engine with an ecu and injection (The original is an air-cooled carbureted unit), and it only fits after extensive modification, meaning that this swap is very cash and labor intensive. Honestly, If you don't know what you're talking about, just remain silent in the future.