Yeah, I have never seen any non-stock wheels on a 123 that looked good, IMO. Some were tolerable (the BBS-style honeycombs weren't bad) but most just looked wrong. The 124, on the other hand, responds very well to newer OE or aftermarket wheels. The W202 Sport wheels on my one 124 make it look 10 years newer! All highly subjective, of course. :p
On the tires, most folks go one or two sizes wider but keep the same tall aspect ratio - killing any possible performance increase. If you reduce the aspect ratio at the same time, you can pick up a smidge of handling as long as you're only going up 10-20mm in section width. I could see putting a 205/65 in place of a 195/70 stock tire. But trying a 225/60 or 235/55 would just be laughable - on the stock wheel width. The wheel would swim around so much inside the tire, the handling would be interesting to watch at an autox. I had 235/60's on a 7-inch wheel on my 70 Impala, and I could push the car side to side and watch the car+wheels swim on the tire! It looked good, though, and the Impala wasn't exactly a great handling car - even with Polygraphite bushings and massive sway bars (no matter what wheels/tires it had).
Overall I still recommend mounting stock tire sizes on stock wheels, unless you have some very special reason for doing otherwise.
Regards,