Yes the MC16 can be put into the MC18. I've done it myself. You take 8mm off the (I think) sprocket side of the upper rear engine mount. I used a grinder and file.
Hang the motor about in place, and see where the chain run lines up to see which side it is.

If the MC18 cylinders or heads survived, use them. But only as a pair.
I had full MC18 electrics, except the PV servo. You gotta use an MC16 one.
Use the MC18 carbs & electrics, MC18 heads on MC16 cylinders, or MC18 top ends complete.
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The Chopster