1999 Volvo V70 XC engine blown... not sure what my next step should be?

I am not very car savvy, so please bear with me.

I have a beautiful '99 brown Volvo wagon, my first car which I bought last February at 132k miles for $2,200. I've put about 22k miles or so on it since then. Last week I drove ~75 miles, parked, and when I tried to leave about 30 minutes later, my car was having trouble starting, and when it did the check engine light went on, and it was running all gluggedy/bumpy, so I got towed back home and to the shop. The mechanics determined cylinder #4 has no compression.

I am fiddling with a few different options, with the advice of my boyfriend who is vastly more knowledgeable about cars. I love this car and it has served me well. Aesthetically, it's beautiful, down to the special edition brown color. I love having the cargo space and folding seats, and I've used the space many times for car camping. I've also been told that it is a very safe vehicle, which is important to me. The only downside is not the greatest fuel efficiency. Overall I'd typically get ~20-22 mpg. I don't know whether I'll find a car I like as much as this one at this point in time.

I suppose it all comes down to what's the best financial decision that is also not compromising too much. I like having a beautiful, safe, well-running vehicle, what can I say? At most, I could spend $4k, but ideally less than $2.5k. I can live without a car for the most part for the next 2-3 months between bike, bus, and my boyfriend's car. He has a manual which he is teaching me how to drive.

Here are a few options I've been fiddling with:

-get engine rebuilt

-get engine replaced

-buy same car and take good parts out of mine

-find another car altogether and get rid of Volvo

The major decision I ought to make this week is whether I should keep or sell my Volvo. It's still at the shop, and I need to get it out of there soon.

I am looking at different wagons and hatchbacks. Right now I am keeping an eye out for a '93 Saab 900, about which I would be ecstatic, given I find the right one, but I am concerned about safety features and reliability.

I don't drive too much. I quit the job that had me driving too far. I drive a bit of a distance once or twice a week, about 35 miles one way on the most relaxing highway, to work. My college is about 10 miles away, three days a week. I go on 100+ mile trips maybe every couple months. I like having the freedom to go the distance when I can.

This has been slightly incoherent. I apologize. If there is other pertinent information I omitted, please inquire.

TL;DR - Wagon, hatchback, Volvo, and Saab people - can you help give me a well-rounded idea of a good next step vehicle for my driving journeys?