Well you better have some good power to outrun the Honda's Putting out 130hp stock, they're pretty fast. A kit Cedia wouldn't be much of a problem though.
I dunno much about the Starlet but had a Tercel Joinus EL51 which was similar chassis and same engine, and that put out around 85hp stock, had rear stabilizer and weighed 850kg, cat was cut out later, so even less and that had a great acceleration even on a 4 speed gearbox and being a sedan, also good handling. So you could, theoretically at least, easily tune yours naturally aspirated to outrun them
Btw, 4E-FE engine right? What's your fuel economy? The Tercel did about 13/14 km/l in town, while not going to save fuel. Feels tiny and I like the injectors' sound at high rpm
Specs - Cedia CS2A (Manual) 90hp 1080kg, (CVT) 100hp, 1130kg vs. Civic EG8 (Manual) 130hp, 1040kg vs. Civic EK3 (Manual) 130hp, 1050kg vs. Starlet EP91 (Manual) 85hp, 840kg
Your aims aren't very high, so need not hurt your economy with a turbo to beat stock cars (if ricers) nah?
Most people here prefer K&N, but I stand by AEM. Personal preference, just look at their graphs and decide.
Edit - You're running 9.88kg/hp while the Cedia is already beatable as it's got 11.3kg/hp, but Civics are ahead at 8kg/hp for EG8 and 8.1kg/hp for EK3. So guess 120hp would be sufficient, but depends on many other factors also. Seems you may have to go turbo after all... 4E-FTE puts out 135hp stock, more than enough for your purpose, being the lightest.