Today, dollar for dollar, is the 318 faster than the 340 ???

My take would be to do the opposite. I'd build the snot out of the top half (cam, heads, intake, carb) and leave the bottom end alone. I know a guy that raced a 318 in stock eliminator and shifted at 7200 rpm's for 4 yrs with stock rods and crank. They are tough.
I agree but some worry about the bottom end. I really think that are pretty solid.