yes a stock or nealry stock 318 shouldn't hurt it, don't go crazy with the tires so it doesn't get too much bite. I prefer the 8 3/4 but the smaller rear should be fine in a lightish car and lower torque ratings.
keep the 318 as mild as possible a 81/4 would hold up better the 71/4 were generally used behind slant 6's
I would go with a 8 1/4 if possible but in a light car with a mild 318 and minimal traction, a 7 1/4 will hold up, I had one in my Valiant that saw lots of abuse and never broke.
It would hold up fine IF there is no traction or no abuse. Add either and the life expectancy can be reduced to a couple tenths of a second. That said, I ran across a 3:21 geared sure grip 7 1/4 once, that one was a tough old bird. Most of the 7 1/4's I've seen broken, blew out the spider gears Gene
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