Unfortunately, the "surge" problems could be caused by many things...my W124 has the problem, and I just live with it, as I haven't found time to pinpoint the problem...and I can't afford to just "throw parts" at the problem.
As far as your temp indicator...MB temp sensors are dynamic, so you will notice the gauge needle rise and fall as you change speeds, ambient temps, driving environments, etc. A lot of other manufacturers deliberately set their gauges up to stay at a "midpoint", and will hold that postion until a serious overheating problem results.
Personally, I like the MB versions better. I know what "normal" readings look like, and when something is amiss, I will deal with far sooner than AFTER I blow a head gasket or something!
You can do searches here and find varying opinions on what to use for normal maintenance. I personally stick with OEM filters and brake pads. My ML is on the synthetic oil program, while my other MBs go the "dino" route. For coolant, I use the pink MB coolant on ALL of mine.