I recently completely rebuilt the wiring harness on my 1993 300E 3.2 M104. Soldering would be your best bet as it will give a lower resistance and more durable connection.

If the insulation is crumbling badly, you might find that performance problems crop up as you handle the harness. If it is bad enough to cause you to want to fix it, you might be better off to go whole hog and rebuild the thing. If you decide to rebuild the whole harness, take your time and do one wire at a time.

I found it helpful to lay the old harness out on pegboard and tie down each connector and branch point with wire ties. Lay the new wire out over the old wire, unsolder the old wire from each connector and then re-solder the connector to the new wire. As the wires come together to form bundles, tie them together at the branch points so that all of your connectors will land in the right spot when you reinstall.To make trouble shooting easier in the future, buy a pack of wire markers and label each with a unique number and cross reference this number with the original wire color code. Keep copies this reference with your owners manual and taped into your shop manual.

The pins on the computer connector are held in by two small metal tabs. You can push the tabs in with a dental pick or similar tool and pull each pin out for re-soldering.

On the M104, the engine monitoring leg of the harness is comprised of shielded coax. The insulation on the center conductor on this section appears to be silicone if it is similar on yours you might not have to replace it.

The wiring in the area under the spark plug cover and around the coil packs on the M104 is kind of tricky as well. I had to perform surgery on the funky rubber shape to get at the wiring scheme . Once i figured it out, I laid out the scheme with new wire and wrapped it with self amalgamating loom tape to approximate the funky rubber part.

When you are all finished wrap the new wire harness with self amalgamating tape ( you can get it at Walmart in the plumbing section for less than $5.00 a roll or at the auto parts store for closer to $10.00 a roll.

You will need 18ga, 16ga, 14ga, and 12ga wire with decent insulation. The wire I used was rated for continuous service at 120 deg C. The bulk of the wire required is 16 and 18 ga. There are a number of online wire sources. My total cost for wire and solder was $38.93.

Good luck
Greg