fastest in what way? 0-60, 50-70, top speed or point to point?
While I can identify with wanting a car to be faster, having a "fastest 318i in the area" seems like a pretty daft aim to me. Whole plethora of reasons, the main two being (without wishing to disparage your car) that having the fastest version of the slowest engine (ignoring the 316) seems like an exercise in futility - you want it to be the fastest, so it's for bragging rights and not personal enjoyment - you'll still get spanked by all but the lowliest models in the range, and I notice you have a 318i Saloon, which has about 25bhp less than a 318is coupe of the same age, so you're already at a disadvantage.
For the amount of money you'd need to spend to get a worthwhile increase in performance, you'd be better off getting rid and buying a 325i or something - especially with the prices of E36's these days.
If you really do want to make your 318 go faster then (and I don't know anything about the specific engine and availability of bits so I'm going to generalise) you'll want to start considering:
-Breathing
(cheapest to most expensive: sealed cold air induction, decat pipe, cat back exhaust, manifold, bored out throttle body, port and polish the head, check on flowbench) - don't forget that breathing is like a chain: sticking twin 5 inch bean cans onto a 2 inch exhaust isn't going to produce any power because the 2 inch pipe is still strangling the airflow. I've no idea what the breathing is like on a standard 318i setup - it could be that it's perfect as it is (for example, you can spend £600 on a new SS manifold for a DC2 integra, but the original is so good that all you'll get is a shinier manifold).
-Cams and Cam Gears (MUST have remap done)
-Lightened flywheel and pulleys (see below)
-Engine Management (you'll need to do this to make use of any other modifications).
Don't know your level of tuning experience, but please DO NOT make the mistake of working out power output with 'Nova Maths'
Standard Car = 120bhp
Induction Kit Claims 5bhp
Exhaust Claims 7bhp
Cams Claim 15bhp
Car IS NOT 120+5+7+15
The BEST way to make a car faster? Make it lighter, and remove transmission losses (as touched upon above):
Strip interior
Lightened pulleys and lightened flywheel reduce the amount of torque required to spin the engine and accessories.
Remove the air con and power steering (both have pumps that take direct feed from the engine so you'll free up a few horses, NB You won't be CREATING any extra power, you'll just be sending more of what is there to the road)
Lightening rotational unsprung mass (wheels, tyres and brakes) will have a huge effect.
The above have the added benefit of helping EVERYWHERE, not just straight line or whatever (better throttle pickup, flatter in the bends, stops better)
I've not even touched the tip of the iceberg, but hopefully have illustrated how "make my car faster" needs to be rather more specific..and maybe given you a few things to think about at the same time!