Go for the heart!! You are right, there is NOTHING like owning an S-class! What a superior vehicle to almost any other on the road. Driving it was a dream... big, but handled remarkably well, considering it's bulk.
We had a 99 S420 for about 3 years. We had 2 minor warranty repairs within that 3 years....
1. Second vacuum pump (that assists door closes) replaced and a loose rear view mirror was replaced because it came loose.
No doubt, the 97-99 were the best models... most of the kinks were worked out. I would go for an S420 no doubt... The S420 has a NICE chunk of power on the highway... but when cruising below 40 mph... it really drove like a boat, compared to my C280 which zipps around below 40. Regardless, it's by no means slow for a 2 ton plus Mercedes!
The 320 motor is probably the most reliable, however, I have heard of no major problems with that 420 motor either... And if cost was an issue, I'd still stick with the 420... it's a darn good engine.
Go for the last model year you can, IMO. Either way, good luck and get maintenance records! And I would suggest you try for a STARMARKed Mercedes (mercedes used car program). The cost will be slightly higher buying Starmarked at a dealer vs another place... but the extra cost is well worth it IMO... warranty to 100k!
Good luck and you won't be disappointed!