It makes a real difference in traction, even on street tires. True DOT drag radials (or slicks) run on far lower pressures. Next time you're at the strip, and spinning the tires at 35psi, let 10psi out of the rears and try again. I'll be shocked if you report zero improvement in traction. I find the sweet spot on street tires is generally in the mid-20's.
No, they are different. The S-class wheels will have M14 bolt holes and ball seats. You'd need to use special M12 bolts with M14 seats to mount those up. The 500E wheels are specific to the 124 chassis. And they will be too wide, wrong offset, cause clearance issues, etc. You're better off sticking with 7.0 or 7.5 wheels on that car, around ET37-ET40. Tons of choices from the 202, 203, 208, 209, 210, and 170 chassis. Don't screw around with 124 or 129 wheels, that's asking for problems.
Front/rear only is for clearance, you can run a little wider out back (8.5 with 245's, with the proper offset, is the realistic maximum on a non-500E). Up front, 7.5 with 225's is fine, 8.0 with 235's is pushing it. All of these combos need rolled fender lips, fender spacers, and preferably the strut travel limiters too, as detailed in the AMG wheel install docs on my website.
Uh, btw, we should probably move this discussion into a new thread, don'tcha think? The CIS guys probably aren't interested, lol!
