RE: Hubs
The closest you could get would be to use one of the existing holes and add 4 new ones, making a 5x100 pattern. That gives you 18 degrees of separation between two of the tapped holes & existing ones, which is definitely not a whole lot. Not an idea I endorse. Building your own spindles from scratch is a better idea IMO. Who knows, maybe some existing BMW model uses the same spindle geometry and has a 5-lug pattern already in it.
RE: Cams
If you are going to grind down the base circles, you may need to look at custom lifter shims so they don't pop apart. Since you are a DIY kind of guy, you can in fact turn out custom spring seats and other parts on a lathe and send them for case hardening. The ones in my valve train were done exactly as such. How much max lift can you run before you hit coil binding issues? Beyond spring issues...how much higher can the lifter bodies sit before their oiling grooves no longer align with the oil galley holes in the cam trays? Meaning, the lifters get starved for oil when the lifter is in its rest position. Then, and this bit me in the ass, you have to look at how the increased lift on the nose of the cam is going to travel up the leading edge of the lifter. Too much lift on flat tappets and you get what happened to me (linked pic). You must run oil with high ZDDP, and MM's oil life tests concluded that only Castrol 10W-60 TWS and Mobil 1 15W-50 provide any sort of adequate protection.
http://bmw.e30tuner.com/images/my318is/pic/deadspring/int_c1.jpgIf your proposition is that you are taking so little off of the base circle that it won't affect anything else, then I can't even see why you are bothering with this. Every micron off of the base is a micron added to max lift, and you won't be able to reshape the nose much to increase duration unless you take a fair amount off of the base. "Cam grinding theory" goes well beyond "grind down the base circle to buy lift and more room for duration."
Welding to change the profile is perfectly acceptable as a practice and often employed in situations where the customer isn't planning to build a custom valve train (as well as in systems where they are). It means that the extra hardening / tempering step is needed, which isn't the case when reducing the base circle, but it's a trade-off.
Believe me, you are far from the first guy that has come through the forums intending to reinvent the cam modding industry. Wanting to do it to have some fun and learn is one thing, and totally fine. Claiming that you are going to out-do established cam companies and sell a superior product before even getting a single DIY-cam running is just silly. I hope you prove us wrong, really, it would be an epic DIY enthusiast moment. I won't believe it until I see it though.
I gotta ask again...what lift and duration are you targeting? Get some data going in here. It isn't exactly going to be a trade secret. MM publishes pretty reasonable details about the grinds for their Sport and Rally M42 engines. What re-shaping of the powerband are you going for? How far can you lift on the stock springs before the coils bind? Planning to dyno the car with stock cams and the modded ones?
Here's a pretty slick mod that you should look into while you have the cams out, BTW.
http://www.youtube.com/watch?v=ynVBlDMow3k
