I have a '94 Starmarked wagon that I truly enjoy. The other things to look for on this vintage 124 wagon are the usual air conditioning problems which can be expensive to fix and the main wiring harness. There is a service letter or some such thing out on the harness and it should have been replaced free of charge. I've had to replace warped rotors on my front brakes 3 times in the last 7500 miles or so but none of the other wagon owners I've talked to have had the same experience so it is probably something unique to me and my car.
Can't help you much on the paint issue. My car is Arctic white and has held up well. Maybe just the hood would need respraying??
My car is quite basic, sorry I can't help you out with the e1 and e3 packages either.
Good luck, I wouldn't part with mine for the world.
92 300E (Black/Grey interior: wife's car)
94 E320 Wagon (White/Saddle interior, Eibach springs, '96 E420 16 x 7.5 wheels)