Visible sparks are not ok. I'm not familiar with your particular plug wires, but that normally means the insulation or wire connector is damaged.
If you see a spark, at a minimum it means that you're not getting a full spark on the actual plug because you're losing energy. It can also lead to premature failure of your coils because they are now trying to ...
The common sequence for VW is what you already tried, but you may have done it out of sequence. Follow in order to see if that help.
Insert master key into the ignition switch and turn the ignition
switch to the ON position.
Within 30 seconds, insert the 2nd key into the driver’s door lock and lock the driver’s door manually.
Press the LOCK or UNLOCK button
I'm not familiar with the VW Fox because I'm an American, but it sounds like the central locking controller could be at fault or a fuse for the locking mechanisms is blown. On the VW's that I have had, the key was mechanically connected to the lock mechanism, but from what I can tell, the platform your car is on has purely electric locks. So if you have a ...
I find it hard to understand what is really going on from your description.
But my guess would be something electrical.
I suggest checking:
alternator, belt, pulleys
crankshaft & camshaft sensors
Post more info and I will edit as well.
That combination of combustion issues could indicate dirty/worn throttle body or IAC (as mentioned by SteveRacer.)
The "turbo lag" symptom makes me think something is stuck in a way that restricts airflow.
Inspect these to diagnose, listen around the engine bay for hissing sounds that could indicate air leaking as well.
This sounds like it could possibly be a rich fuel mixture, or low RPMs. If the RPMs appear to be at a normal rate, then my guess is that a bad O2 sensor reading is causing your car to inject too much gas and not enough air.
Have you tried resetting the car computer to see if defaulting to the basic level fuel/air mixture temporarily fixes the problem? If ...