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I got my head milled at a local shop for a 100 bucks and it's a great mod. My compression in each cylinder previous was 114 and now they're each 150. Big difference for a pretty simple mod. And yes, clutching is a big change too. I had my primary swapped out and the shop also rewieghted the clutch as well. These are both great mods to take care of as far as hp gains and throttle response.I'd look into a milled or aftermarket head. I have a 05 'M7 with an RKT head with the 14:1 domes and it rips.
Clutching is crucial though, especially on the M7's, so that would be where I would start. Head and clutching, that'll put a dent in your wallet, but won't be too bad....just my .02