Why are 318's low HP and torque?

Personally I love 318's. Best bang for the buck if you get a good low mileage one and put on 4 barrel setup with headers. Once you start factoring in machine work to build one though, you may as well find a 360 to build as it will give you more from your $ invested in the machine shop.

If your goal is a stroker engine right from the start, you could go with 318/340/360, any of them at that point, whichever one you have.

I have a 318 in my 73 Dart Sport, 74 Valiant, 76 Cordoba(getting a 360 swap), and my father has one in his 91 Ram. Fantastic engines!