What is the rpm sweet spot for highway driving

Even with tall rear gears the cruising RPMs for our old V-8 Mopars without overdrive are much higher than they need to be. A 318 with a small cam like yours would get best gas mileage in the 1800-2200 range and could probably go a tad lower; problem is you don't want to be under much load at that low speed which is why newer cars shift down from top gear with less than 1/4 throttle even though they cruise at 1000-1500 RPM.

If you say your car is sluggish off the line I'm guessing you already have 2.76 gears? Your cruising RPM with those gears is already high so going with any "shorter" gears will just take it higher. I think going to 3.23 gears from 2.76s would be nice, big enough jump that you will notice it wind up quicker but 3000 RPM cruise will still be reasonable. Personally I've found that gear changes don't seem to increase the torque as much as make the engine rev up quicker and easier to keep in the powerband, that's just based off feel though shorter gears DO give you more torque at the wheels.