if you look at the work being carried out on honda's, saxo's 106's, fiestas, escorts, fiat's etc etc.... anything is possible.
its just the micra scene is so "low budget" that nobody touches the car in the same way.
if the car was involved more in motorsport, or had a performance model back in the day, then more people would appreciate its handling / tuning credentials.
stuffing a hyabusa turbo in the back of a mini has been done so many times now its boring, stuffing a hyabusa engine in a micra..... thats unique and would get lots of attention.
the engine i think, that would be most suitable for the micra would be either the SR16VE N1 engine from the almera. Or the mid mounted 3SGTE from the mr2 turbo. (has been done to a yaris)
both these engines would be stupid quick, the sr16ve would scream its nats off (see what i did there) and wouldnt look out of place either.
the 3SGTE is capable of over 800bhp, mounted where the fuel tank sits now would produce an awesome handling machine that is untouchable..
it might be a vvl, but that just means the power delivery is given at a higher rpm than a car without vvl.
if you have two cars with 150bhp, one with vvl and the other without, they will perform almost axactly the same, however the car with vvl with get a "kick" in torque on the switch over, much like a vtec engine... the non-vvl engine doesnt get this kick but it doesnt need it as the torque is allready up there anyway.
the only thing VVL, VVTI, VTEC MIVEC ETC.... allow you to do is run a wild cam up the top end and mild cam near the low end for economy..
if you ran the wild cam all the time the two engines would perform the same in a car as light as a micra.
so a bone stock SR16DE without VVL, but with a set of cams, is just as good..