What I would do is just get that YRV K3-VET halfcut , overhaul it and plonk in. Reliability ? Sure it is, since Toyota already done all the R&D on the stock engine. You rojak your 3SZ-VE and K3-VET wont guarantee you reliability. There is no shame in downsizing the displacement but getting more power than original engine. Well that is how European cars these days are going for. Don't chase power so much the stock YRV engine is really good enough, aim for reliability since you wont enjoy having the car sitting at workshop most of the time than actually driving it.