Tsi AWD
Mmmmm, when you upgrade the exhaust, you start from the tip and go up to the turbo, not the other way around.
Basic mods are, an open air filter, a 1G BOV (the 97 BOV leaks past 12-13psi). If he wants to keep the stock exhaust, he could bolt-on a high flow cat (Dynomax sells them).
He could upgrade his turbo and put a bigger impeller wheel in. We know a place that will rebuilt and upgrade the stock turbo for about 600$, a good deal.
That should give him a good 40HP. Of course, he'd get more with a better exhaust, but if he wants it quiet, that's about it.