The kiss of death in your list is the rust and the paint job. Unless you're going to do this work yourself (with mediocre results), the cost is more than the value of the vehicle.

With an older M/B that has been poorly maintained, it's very possible to spend $5K or more on parts.........even if you do all your own labor. This is not a sound decision financially. It's much better to buy a $5K vehicle with pristine paintwork.........one where the PO has invested all the money in parts.

As for swapping the 617 into one of the $hitboxes.........the work involved is significant and the benefits are questionable. The body is horrible from a Cd standpoint and the resultant fuel economy isn't worth the effort, IMHO.

There is an old adage that runs around on this forum..........perfect for situations such as this one:

There is nothing more expensive than a cheap Mercedes-Benz.