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I don't remember how our fuel filter is setup, be I'm pretty sure if you strip the bolt you can just get a new one, not too sure what welding you're talking about. If you got an OEM fuel filter, it should already come with new bolts (I think, did it about 2 years ago, or did it only come with washers?). If you have room, take a dremel and cut the edge of the bolt so you can try to take it off again with a wrench.
As for your engine problem, first get a compression test (both wet and dry test). When you're accelerating from a stop light, do you blow smoke? Or is in only when you're starting the engine. I'm thinking that it's the valve stem seals as well.
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-94 VTEC
-98 M3
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