Even with the 4-matic operating properly, you're still dealing with the traction ability of your tires. R&T did a huge comparision last year, and they found RWD cars with snow tires had much better performance than AWD counterparts with all-season tires.
The best is AWD with dedicated snow tires. (Except in stopping).
Get some snow tires on 'er, and if you still have all those problems, have the AWD system checked. Even if the AWD system is malfunctioning, you didn't waste a dime on snow tires.
1998 C230 "Black Betty"