-i'd be happy with maybe a sport k03 chipped exhaust with nice valve train
Booooooo!!!
-is the k04 really worth the extra price
Yes. Yes it is. You can get a brand spanking new one shipped with install hardware for $800
HERE
-does it hold up over time(if i rebuild this thing I wanna make sure I get over 100k on it)
Yes. As long as you let it cool off before shutting your car off, it
should be fine. (should= I have no reason or have heard otherwise)
-how is the OEM head setup...i mean does the stock valve train hold up with extra horses and higher redline?
You are fortunate to have the most desirable B5 1.8t. The AEB longitudinal motor has larger intake ports than the post 00 1.8t's. People have run the motor to 8k while drag racing with the stock top end. A K03 or K04 will run out of steam long before the top end goes.