I wouldn't go too crazy, especially with a 0,5mm gasket (that's already (0,7mm thinner than the stock gasket!). You can remove 1 to 1,2mm of material from the head, but this also erases the gas ring (in case of a head gasket failure this ensures that exhaust fumes are vented into the engine bay through a hollow bolt, instead of exiting in the cabin which is dangerous!) Also, I feel that raising the compression alone won't make a huge difference. Tuning these engines is more of a package deal: a bigger carb, sports exhaust, more agressive camshaft, some mild porting and, yes, raising the compression slightly.
The 650cc engine isn't quick, but I don't find it incredibly lacking. If you're budget constrained I would opt for a nice revision (honing, skimming, new set of pistons, new seals/rubbers) which is not too hard to do it yourself (except for skimming/honing of course). With a nice, refreshed engine the Fiat will have no trouble in city traffic!