In order to go to a 6-cylinder with a simple swap in, you'd need a different front subframe out of Euro E21 323i (or many hours of fab work). My e21 has seen over 15 races with an M10 and personally I wouldn't go to a 6-cyl engine due to higher front end weight, much higher fuel consumption, tire wear, brake wear... And speaking of being bullet proof: the M10 is on par with any other reliable engine.
Now, where you gain power is dumping the mechanical fuel injection system for something different: an old Weber with the intake manifold from a 2002 (bolt on, but need to change a fuel pump form high pressure to low pressure one) will give you 10-15 HP increase. Or EFI out of early '80's Volvo... That gets you 20-25 more HP.
Also, a stock M10 in the E21 puts you into Class B, almost always, while a 6-cyl or M3 engine will lend you in Class A.
(I'm only advocating for the no-swap option, because I think there isnt' enough E21 representation in our series .
1982 BMW 320i #94
Rusty Cock Racing