to think you as an engineering student can build a better engine than a massive company like Toyota which is staffed with legions of experienced, credentialed engineers with access to the best equipment and materials money can buy.
Replace "engineering student" with any of our names, and "engine" with "car", and hopefully you'll see the irony in that statement.
Like someone else said, large companies are not making performance a priority, they are taking into consideration tooling costs, production costs, the average person's maintenance habits, etc.
OP, why not make a rotary then? I'm no expert on how they work, would it be possible to use the eccentric shaft from an RX-7 with your own housing and rotor, say with a displacement of 1 litre+ per rotor instead of 700cc? The eccentric shaft and apex seals are the critical parts of the rotary, and the apex seals could be transferred over as long as we kept the rotor width the same (which would be neccessary anyway to use the eccentric shaft, if possible).
A 3 litre triple rotor aluminum engine sounds good to me. It would help tremendously with low end torque, and with a rotary that size N/A would be fine, which is good for reliability.