Yep, what you mentioned will add horsepower, or you could use a good 360/340 head (LOOK OUT! here come the compression screamers!). Both will add horsepower.
The increased flow will trump the compression drop.
I have put many 340/360 heads on a 318.
However, if you want to put 340/360 heads on a 318, the best way to do that is to get a set of 10.5 pistons for a 318, and then with the larger combustion chamber of the 340/360 head, it will end up at 9.2 compression. Perfect for a street motor on pump gas.....