The transmission case is magnesium. And aluminum, once it starts burning, will continue to burn very well indeed...
In stock form, the torque curve is almost dead-flat between 2500 and 4500 RPM. It is at or above 105 lb-ft that whole stretch, and hits 108 lb-ft at 3500 RPM.
Your acceleration in a given gear is greatest at the torque peak. However, changing up to the next gear will pretty drastically reduce the amount of torque you are putting to the pavement. Very often, you have more torque at the wheels when you are above the torque peak in a lower gear than when you are at the peak in a higher gear.
In my stock 914, I shift out of 1st or 2nd at the redline. Shift out of 3rd somewhere between 5000 and redline. I shift out of 4th at 5000 RPM, but it doesn't really matter. The car won't accelerate at that speed in 4th or 5th...
That's at the track, though. On the street, I usually try to keep the revs somewhere in the 2500-3500 range. They might drop down as low as 2000 while cruising, but due to my short tires they usually wind up higher than that. I often wind up cruising on the freeway at 4000 RPM. (That gets old after a couple of hours....)
--DD