Don't think the I-100 cannot be adapted for newer engines and those six 13mm HMG aren't peashooters. It will still be a viable fighter until the late 1930s.
I'm not so sure. The Mercury eventually produces 995hp on 100-oct fuel [not likely in SA anytime soon] and 840hp with 87-oct. I don't think its possible to replace it with a larger Pegasus. You could maybe get away with mounting a Taurus but that'd require a lengthening of the fuselage to balance the extra weight forwards.
As for it remaining competitive until the late 30s. Maybe in South America but I can't see it being competitive with other designs: Spitfire, Bf109, C.202 etc or the CR.35 posted earlier in this thread.