It's totally possible with a custom tune, and even the off the shelf tunes keep the torque with an IS38 pretty low due to the 1.8's more limited fueling. APR's not going to do a custom tune that lowers the torque for you, but there are a few people out there that could make you tunes keeping it under 300ftlbs. Now in days you could even do it yourself with open source tuning. IMO any torque level that would cause clutch slip on the stock 5 speed clutch is also one that would blow up the 5 speed, so going that route I would recommend keeping the stock clutch too.
Of course, saying all that I do not regret my 6 speed swap. $2-2.5k in parts for a bullet proof transmission with better ratios (I got a mk6 6 speed, so super close ratios). I just got another one recently and will be selling mine due to bolt hole compatibility with the bevel boxes. Going price is around $900 for the transmission, plus clutch and misc parts puts you in the above range. Adding a wavetrac is about $1700 for parts and labor (new trans is currently in the shop getting this done lol). It's an expensive pill to swallow, not as bad back when GTIs were still going for over $20k used, but now the price difference from a base golf is a lot less.