I don't know a lot about the Corolla, but I do have once owned a Nissan Datsun 1200 (yes, 1200cc) with a three-speed auto without TC lock up. It was produced in circa 1970. I got about 34 mpg (Imp), translating to about 27 mpg (US), with about 30/70 city/sub-urban driving (no highway where I lived then). I was FE conscious but did not hypermile. The car must have benefited from its own light weight.
I have had some chances in the 1980s to ride in a Corolla with a TWO*-speed auto transmission . It was driven by my friend. Overall, it was a very practical car for city driving. But sorry, I have never asked to know about its fuel economy. I would intuitively say that it shouldn't have been terribly bad. Otherwise my friend would have complained a lot.
Back to the question of whether a three-speed car is acceptable, I guess you can trade some FE for the Corolla's known reliability. Forgive me for stating the obvious, a reliable car uses up less of your money for repairs so that you can spend a little more money on fuel. It may not be very green, as are other cars produced several years ago, but a 1200 to 1800 cc car will quite likely be greener than a huge SUV any way.
I don't know anything about Toyotas, especially when it comes to modding them (largely because almost NOBODY does). But when it comes to Civics, having an automatic is a non-issue since it is a relatively easy thing to change. You might want to look into this with the Corolla. Because if automatics are cheap due to lack of interest, it could be cheaper to buy an automatic, and drop in a manual. Also, it could just be MUCH easier to find an automatic car to do this to. This is certainly the case ALOT of the time with Honda CRXs: clean automatic cars are cheaper and easier to find. And the swap is not at all hard.
One more thing. As I always say, going for the lowest possible freeway revs may not be a good idea. I know that the mantra seems to be that lower is ALWAYS better. But sometimes, lower freeway revs can actually DECREASE mileage. I found this to be true when I went from an SI transmission to an HF transmission in a DX Civic (mileage decreased by around 3-4MPG!). So unless you have an engine that was actually made for low RPM cruising, I would not take it as a given that taller gearing will increase mileage.
I think that's why a lot of DOHC motors have gearing that has them at 3500-4000rpm at 60, no low end torque.
I remember The RoadWarrior..To understand who he was, you have to go back to another time..the world was powered by the black fuel & the desert sprouted great cities..Gone now, swept away..two mighty warrior tribes went to war & touched off a blaze which engulfed them all. Without fuel, they were nothing..thundering machines sputtered & stopped..Only those mobile enough to scavenge, brutal enough to pillage would survive. The gangs took over the highways, ready to wage war for a tank of juice