Every motorcycle mechanic I've seen has a sign in the shop: speed costs money, how fast do you want to go. That sign isn't referring to the costs to modify an engine to go faster so much as the cost to constantly rebuild the engine after they modify it to go fast. I've seen two identical engines, one rebuilt to stock and one rebuilt to max speed - the cost for both rebuild jobs was about the same (the parts for speed were more - but not much more compared to the labor which was the same), but the engine rebuilt to stock ran for thousands more hours, while the one rebuilt for speed has the mechanic bragging that it lasted a whole 80 hours!
My dad used to say the perfect race car would explode into a million pieces just after it crossed the finish line. Anything more robust is wasted weight.
Normal cars are designed from wide temperature ranges (something like -30F to 130F), -100 to 14k feet altitude, with a wide range of sand, dirt, snow, ice, hail and a wide variety of roads surfaces and steepness. Generally they seem designed to last 100k miles under normal use and terrible things don't happen if you forget an oil change.
You can do a chip tune that might get you more HP across a wide range of RPMs, but you won't be as robust, will need maintenance more often, and will likely wear through oil, gas, differentials, clutches, and related more quickly.
There's MANY things you can do that all basically come down to burning more gas+o2 in less time. Higher intake airflow (turbo, supercharger, better/missing air filters, scoops, etc), bored out cylinders for more engine displacement, more gas (increased fuel pressure/pumps), increased RPMs, and decreased exhaust pressure (better pipes, decreased or missing cats).
Trick is, more gas+o2 burned = more heat, more wear, more stress, hotter oil, faster clutch wearing, faster tire wearing, and generally faster brake wearing. Turbos are driven by exhaust, spin at crazy RPMs, increase air intake pressure, and generally are harder on the engine and oil and make cooling more of an issue. Higher RPMs require more precise timing, better valves+springs, better balanced cam shafts, etc. So what might seem like a cheap/easy change like increasing turbo boost from 10psi to 15psi might like a good idea, but have major impact on engine life and maintenance costs. A single blown head gasket from the increased temp, increased vibration, and increased pressure can be very expensive.
Much like CPUs of today, cars are generally designed carefully for their performance level and there's less spare performance left to be easily tweaked. Much like how older CPUs could be overclocked for substantial performance gains. Now both cars and CPUs will throttle if they don't have enough cooling or any of numerous other sensors detect potential problems. It's pretty common these days to see a car with 300hp, but 350hp for up to 10 seconds before the sensors reel you back in.
Simplifying things in this comment a fair amount, but...
Extracting more power is, most commonly, a matter of burning more fuel, which requires more oxygen. This increases combustion chamber pressure, which drives the piston down with more force; that force is converted to rotational torque and ultimately drives the wheels harder, pushing the vehicle forward faster.
More oxygen can be added in any number of ways; less restrictive intake/exhaust parts, larger valves, cams that are more optimized for whatever load/engine speed you want to produce peak power (or are more optimized for output than, say, economy or emissions), supercharger, turbocharger.
Adding fuel is more straightforward: A higher capacity pump and/or bigger injectors/carbs.
You can also switch to pistons that will compress the air/fuel charge more. This also increases combustion chamber pressure.
You can also run the engine at a higher speed, which will often warrant different cams, stronger valve springs, etc. May also require bottom end uprated components that can handle that task (connecting rods, pistons, bearings, crankshaft).
On the subject of bottom end components, depending on how much you increase cylinder pressure, you may need to upgrade those.
You can also increase output power by reducing losses - a lighter flywheel is a common example with enthusiasts.
Every single one of these involves a trade-off. A lighter flywheel impacts drivability; removing intake/exhaust restrictions and adding forced induction components will both make more noise; etc.
Right. Generally more air and more fuel, produces bigger explosions and bigger forces, so the engine would output more power and torque.
These greater forces cause more stress to factory engine components, so generally at a certain level you will need to replace engine internals with uprated parts e.g. stronger rods and pistons.
