Can you go a slightly lower profile on your tyres (not like there is much left to go down to when you are already at 35 profile on an 215 18!)? It looks like you need to buy new tyres either way.
Just because the rolling diameter of that tyre and wheel combo will be slightly bigger than the OEM wheel and tyre combo. You should run into minimal issues if the entire 18" wheel rolling assembly has the same outside diameter as the original 14" one.
I'd not go wider than the 215s, at least not on the front, or you'll end up with more scrubbing issues not less. Hell i'd not be past putting a 205 on there, depending on your wheel width and so on. If they are indeed only 7 or 7.5" wheels (which seems likely given the large positive offset of those wheels and that they were likely originalyl intended for a front wheel drive car) then a 205 should go on ok.
Stretch isn't for everyone but extensive experience with it tells me it does nothing to make your car handle any better or worse. Also as you go down in profile the more marked the stretch appears, simply cos the sidewall is lower. 195/55R15s on my 7.5" wheels doesn't look that stretched at all but by the time you get to 18s tyres often look stretched.
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