It's a good guess that the rings are at fault, especially the oil control ring which I understand gets gummed up with carbon deposits on these engines. I read somewhere that the standard ring is a solid one piece ring whereas the recommended replacement is a multi part component more like the Cords oil control rings I used years ago.
However, and it's a however that needs to be heeded, if you're stripping the engine to the extent that big ends are being undone and pistons removed from their bores then it makes no sense at all not to do a careful examination of all associated component parts. What are the big end journals and shell bearings like? Does the head need to come off to get the pistons out? (most do as you'll not get the pistons out with the crankshaft still in place) if so then it might need a light skim to ensure the new head gasket seats well. Are the bores in good condition, and so on, and so on. I'm old now and not taking engines to pieces so much any more so not so familiar with these newer "slipper piston" type designs, which to me more resemble the way racing pistons looked like in my day. I've read that slipper pistons with so little skirt support, can sometimes suffer from the lands around the oil control rings breaking up and with LSPI now being a recognized
problem - although VAG seem to be less affected than many others - pistons need to be very carefully examined.
If I was doing this for myself I'd be doing all the labour and much of the checking and taking anything that needed machining to
https://georgebrown.co.uk/ who are conveniently near me for their expert attention. If you're not doing most of the donkey work yourself it can get very expensive if something serious is found to need attention after the strip down has been done. And if you're doing all this and the timing belt - or is your's a chain driven cam? - then it's daft not to fit a belt/chain kit on reassembly.
The clutch? Well yes, I can understand why they are recommending that because, with the engine out of the car, there will be very little additional labour involved, just the price of the parts. Again, if doing it myself, it's a quick job to unbolt the cover plate from the flywheel when there's no gearbox in the way and take a peek. If it's all Ok it can just get buttoned straight back up again, if not replace. If you can't do it yourself then a subsequent clutch replacement means the gearbox has got to come out again with all the labour that entails. If it's got a concentric slave cylinder then definitely fit a new cylinder regardless.
With a name like Scottunes are you Scottish and in my area (Edinburgh/Lothians)? If so a wee phone call to Sports Car Breakers (SCB)
https://www.scbvehicledismantlers.co.uk/ at Newbridge or S&I Thomson
https://sithomson.co.uk/ down in Galashiels to inquire about a replacement engine might be worth doing before you make your mind up which way to go.
