M5Power
Your comparison focuses on the following categories:
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4. Engine smoothness and sound (not mentioning that, while the BMW has FOUR MORE HORSEPOWER it actually would get out-accelerated by the Jetta and a Dodge Grand Caravan)
BMWUSA.com states the 325i hits 60 in 7.1 seconds. I don't know what VW says about the Mk IV Jetta since they've only information on the Mk V, but I do have an old Road and Track which credits the 1.8T with the very same 7.1 second 0-60 time. Both cars will trap in the 93-94 mph range in the quarter mile, making them equals in acceleration. The Jetta has a slightly better power/weight ratio and less drivetrain loss, but the 325 has better traction and easier to launch from a dig. I say stalemate as far as raw numbers go.
You also forgot my points about superior suspension design and components. Aluminium is not cheap to produce and BMW's setup is far superior to the Jetta's torsion bars. Also, there is less NVH in the E46.
Heck, we take my 330i ZHP on long trips over the Jetta because despite it having a MUCH stiffer suspension and low profile 35-series tires, it rides better than the Jetta on VW's softie sport suspension and 45-series all season rubber. In addition, it would crush the Jetta on a twisty backroad. This is the sort of magic suspension tuning I paid extra to have a BMW for.
M5Power
Most of these categories are completely based on opinion, so I'll give you mine. For starters, I think the Jetta interior is actually a very quality place.
I definately agree. It is very good---for a car with a $22.4k sticker.
M5Power
I won't argue turbo vs. n/a. I prefer whichever one delivers the best performance, and that's the Jetta's. To be honest, I think the Jetta is just as refined as the BMW regarding smoothness and sound.
To use on of your favorite words: "Mad!" The 1.8T gets very rough and ragged over 5,000 RPM, while a 325 motor feels like it'll spin forever and love you for doing it. The one single advantage the 1.8T has over the M54B25 is that being a turbo, it can be chipped for cheap power. That is it.
M5Power
Jetta does lose slightly on ride, and by quite a bit on handling. Define steering. The 1.8T's brakes are just as good if not better than the 325i's. I already covered quietness.
Well, the Jetta has R&P steering, just like the BMW. However, the Jetta's steering gives you ZERO information about what the tires are doing. It is as tight lipped as a witness at a mobster's rackateering trial. VW needs to take some lessons from Honda on how to make FWD cars with real steering.
BMW has one of the best racks in the business. Direct, communicative and precise.
And I don't have the numbers in front of me, but a 325i should easily outbrake any Jetta that is not a GLI. The BMW also has better pedal feel. The brakes on my wife's car works just fine, but has a leaden, inert quality that makes it hard to modulate.
Plus, the lack of travel in the pedal itself makes it tough to heel-toe.
M5Power
On the tangible side of things: Jetta offers more stuff, better engine performance, more efficiency, more front leg room, more front head room, more rear head room, and good performance for around $8000 less than the BMW. The Jetta is nowhere near the best car in the class (it's your example) but I do think the 1.8T Jetta is a far better car than the 325i. Maybe $20000 is a slight overstatement, but the 325i is still a poor value at $25k. I think most consumers would give some handling for better acceleration, too.
What more stuff? The only thing my wife's GLS trim car has that a base 325 didn't get is a power moonroof.
As far as space, it's no contest: the E46 is bigger. I don't care what numbers you pull. The cubic inch numbers magazines publish tell you JACK about actual USEABLE interior space. I use these cars every day. There is more shoulder room in the E46, and there is way more rear leg room in the E46. Plus, the E46 has a nicer seating position because the dash isn't so far away from you relative to where the pedals are.
The only space advantage the Jetta has over the E46 is the trunk, which will swallow enough midgets to hold a Mini Me convention.
Since you love the car so much, you should buy it from me

We need a bigger car, so the Jetta has to go.
M