Yeah lowonoptions,
I priced out a 028-903-028D alternator (90 amp) for a 2001 Golf at the
dealer last week and found that they charge $500 for a remanufactured one
with a $200 core charge.  OUCH!!
I told the owner of the car to buy a NEW one from ebay, like item #
130200638067, which he did and I will see later this week.  The ebay one
will only cost $140 shipped and saves him $360.  8^)
Only takes 1 hour to change out in real time, but you might get charged 1.5
hours to switch pulleys over!

Are you sure that you need BOTH Oxygen Sensors?
What are the DTCs stored in the ECM?
Post them here!!!

NO the timing belt should not cause any damage if it breaks, but replacing
the water pump with the timing belt is a good idea WHEN YOU NEED ONE!  ;-)
Your timing belt could last to about 165K miles, but if the tensioner is
making noise now then it is your call!

I vote you do the repairs over several different visits or stages.
1. Replace that alternator so the vehicle is drivable again.
2. O2 sensors or whatever is causing that Engine Check Light to remain on.
3. All belts (Serpentine & timing belt), tensioner, crank and cam seals and
water pump, thermostat with coolant flush.

Do # 1 now and if your Serpentine belt is bad they can slap a new one on
when the alternator is being replaced.
then
#2 after awhile but post those DTCs for us to read first.

Then before next winter do #3, or maybe next year.  Now if the squealing is
bad you might want to do it sooner.  If you are frugal you could just do
what is needed, timing belt and tensioner.  Seals if they are leaking.

It might be me, but it seems like that shop might be charging you a little
more than they need to.
It would be better if you broke down the estimates and posted them here.
;-)

JMHO

I take it until now you spent very little $$$ on the car and some things
like plugs and wires have well out lived their life. So a timing belt change
at 107,000miles.... it's due. That said, do the math, the new VW at $20,000+
or $2400 now and no car payment?