A friend and work mate was killed in the early 1990s when his Cessna "spam can" engine failed. He was on the way to Silverstone for the F1 meeting. It turns out the exhaust valves stuck. What made it even more serious was the problem had happened before and the cylinder head had recently been professionally stripped and effectively blueprinted. We are still using 1940s engine technology, because the costs of homologating anything "better" make new engines near on impossible to achieve.
Arguably the engine technology you’re talking about as found in even more recent Cessnas and many of the new generation of General aviation planes, dates from the 1930s which developed from even older 4 cylinder air cooled horizontally opposed engines found in planes in the 20s.
There are 2 reasons they don’t get updated.
1 is that lycoming and continental more or less completely dominate the general aviation engine world and so there is little competition and therefore little need to update or develop the engines any further, they are stupidly reliable and so under stressed they rarely have problems, also they’re reputations means that all some people will want.
2nd is that there are little in the way of restrictions in aviation in terms of emissions, the emphasis is on reliability and safety so there is no need to develop an engine for fuel economy and emissions like there is with automotive engines.
Some people take a Subaru engine and convert it for aviation use, the 2.0 litre Boxer engine comes with something like 150hp in a standard non turbo form, where as a lycoming 0-360 found in something like a Cessna 172, is also about 150 - 180hp but with 3 times the displacement. Air cooled instead of water cooled, direct driven instead of using belts or chains, magnetos in place of coils. Modern engines are much more highly strung and less reliable.
These days you’re more likely to find someone converting a car engine for use in aircraft rather than develop a completely new aircraft engine.
One of my favourites which I really want to have a fly in in the Diamond DA62 which uses converted Mercedes A class (Austro) Diesel engines as least that has two so if one merc engine breaks it has a spare.
