is it necessary to remove the black metal shroud on top of the engine to get access to and pull spark plugs and check compression? it seems like dark holes and bad angles for the work to be done.

Not at all. On a 2.0 it is quite easy, I suspect a 1.7 is even easier. Not sure about 1.8

Completely doable with all tin in place. I recommend having a magnetic spark plug socket to make things easier.

If dual carbs are installed it can get awkward ~

On a couple of the plugs that sit deeper in the tin, I loosen the plugs, then use a piece of rubber hose tight enough to slide over the plug to finish unscrewing it and pull it out. Same with installation, just get the plug on the hose then get it started screwing in, pull the hose off and tighten with socket.

################# you don't want to drop a plug ##################

Sprout has the best solution and I use the same method ( I have Carbs) use a socket only to break them loose or tighten down rest of the time I use a hose slid over prevents cross threading too

I have no problem with carbs. I use a piece of the cardboard box the plugs come in, wrap around enough on the plug so the plug sticks in the socket. Duct tape the socket to the extension. With the formed cardboard in the socket, reach down and slip it over the plug loosen it up and pull it out.

Me three!

old school vw trick - nice tip.

take it easy screwing them in.
or its helicoil time.
many a vw engine in aus showed the evidence of that.