Can i supe up my 1600cc engine in my 1967 vw beetle

Yes you can!
A few modification are: dual port heads, dual carbs or one larger carb is easier to toon, exhaust headers, cam shaft (I recommend only a moderate cam), and to keep it cool take the oil cooler out of the dog house and make it external with a filter. The smooth flow dog house removes weight and cools the #3 cylinder better than the stock. For competition a scavenger oil pump, and for several hundred horse power you can go so far as twin turbos. But then you need the beefier bus transaxle.
---Or you could put the bigger bus motor and transaxle in it and soup it up instead.
---For drivability an RV cam, dual port W/ a single two barrel Holly 2100 (correct jets are important), a high flow air cleaner, headers W/ a removable baffle, and at least get the oil cooler out of the air flow to the #3 cylinder. Now days they probobly have a nice electronic ignition also.