If you are thinking of using the Corolla for Targa, forget it. The corolla is not 'desirable' enough to enter in th rally... Not even a TE37 Levin (If you could get an ex-works te27 or a replica one they' might consider it)
Also if you build a KE35 to tarmac/targa specs, then you'll need the Levin grille and bonnet, tail-lights and maybe even front guard mirrors, and the biggest engine you'll be able to put in it is a 2T-g with Carbies!!
They are very picky with their vehicle selection. I had a 'works-spec' 323 4wd turbo that was as raced int he WRC, and they wouldn't let me enter.
As for seam-welding, you'll need to strip ALL of the tar out of the shell (inside and out). Use a wire brush, turps, and a flat blade screwdriver. Its a time consuming, m*th*rf*ck*r of a job, and ALL the seams need to be super-clean, or they wont weld.
When clean, just stitch-weld along ALL seams, basically a 2-3 cm weld every 5 cms or so. Strengthen all mounting points for suspension etc with plate steel.
Redwarf would be better for advice, as I never seam-welded the shell I started to prepare.