Yo, sorry, I just started a new job and haven't had free time to surf around o_0
Given what you're trying for (a solid track car) I'd steer clear unless you can knock some good $$ off the deal. My father and I lucked out on ours, it had been repainted a few times, but it was totally rust-free, and we picked it up for $3400. That was a 75 2.0 with rivieras, and 130k.
On the plus side, the running gear sounds solid, and that's the most important thing, as repairing the tranny is both a bitch, and expensive. If you can be patient, and take your time to pull the motor, and get the frame strengthened (a good idea for heavy use, as even the non-corroded parts are weak as hell) and braced, as well as some of the suspension parts, it's probably not a bad buy for say.....$1400 or so? You can pick up Rivieras or Empi's off a Beetle or whatever, get into the bay with a die grinder and some rust-fighter, and clean it off before it gets worse, and weld in some supports. If you have the car apart, I'm sure it'd be something Nate could help you with.
Also, since you're talking about doing a decidedly non-standard motor swap into it at some point, you're going to need to strip it out and brace it, reinforce it, and replace pieces anyways at that point, if it feels decently tight now, replace the battery box, reach what you can and clean it up, and roll with it.
On the minus side, the drivetrain isn't that important if you're going to be pulling it anyways (and you'll need to run an upside-down 915 (should be a side-shift, IIRC) unit with an EJ, as you'll grind the stock tranny to pieces in short order with that much torque). In that case, I'd honestly look at buying something that's already been prepped for PCA or track day stuff. If you're willing to drop 5k, 6-7k on a car already prepped, reinforced, and tweaked, isn't a bad investment. That or try to find a shell/unfinished project and just jump right in with the EJ (20/22/18/25/whatever) and do all that prep at once, instad of doing it once to drive it stock, then having to rip it totally apart and cut it to hell to do the big project. If you buy a rolling chassis, you're not going to feel bad cutting into a mint 914 to add a radiator, holes in the fenderwells to run 235's, yanking the crappy factory wiring to run your own management, etc.
If you want to buy a driving car, a cheap 914 is not a good idea
Look at how much Beetles from the same era go for, in various conditions. You have sheds that got for $200, all the way up to concours/cal customs that go for 15k. You wouldn't buy a $1k beetle and expect it to be in the greatest shape, right?
G'luck, man
That interior is in really nice shape for the age. If you decide to reupholster it I know a place in Tijuana that does it with OEM VW vinyl for $180 for seats, doors, dash, center panel, etc :0