1. There is no way if you are not F/I that you could stay with him unless he can't drive and wasn't shifting right. With a stage 1 c2 turbo set at 6-8psi, the GTS with be running prox. 215-220hp and you are running a lot lower than that. If he knew how to drive, you would have been smoked. Unless he is just playing around with you and still giving you crap about it by saying he wasn't
2. For stage 2, add in stage 1 kit with larger intercooler ($3860) then add in oil temp, oil pressure gauge, greddy Profec E-01 electronic booster controller (electronic is more accurate), pressure sensor harness so you can tune better between with the E-manage (it links the profec and emanage together for this reason and it is only $20), Crower Rods, Weisco Pistons, 550cc injectors, 165lph fuel rail, copper head gasket, get a zeitronix zt lcd bundle (has the EGT, lamda, boost gauge, and a/f ratio readings so cuts down number of gauges you need), need an exhaust (the turbo kit comes with a 2.8" downpipe), colder sparkplugs, RPS Max 6-puck Sprung Clutch (works with the lightweight flywheel a lot better), a lightweight flywheel, MWR Valve springs, MWR Valves, ARP Cylinder Head stud kit, ARP Exhaust Manifold kit, ARP Mains kit (all the ARP kits are bolts that are more stronger and sturdier than stock and are highly recommended) and also highly recommended are bigger breaks which might mean you need bigger tires and obviously rims. You need to control the car so you might need a few suspension upgrades. It will be more than 10k.
EDIT: I have to go so if you want anymore information, pm me