Somewhere in the manual there should be an oil rating. Probably CD or better, but may have been CH-4 by 95.
Use only oil rated for compression ignition engines -- the C rating. Mobil 1 is good, so is Delvac, Delo 400, etc -- the oil postings will give you indigestion there is so much info.
Viscosity is easier -- use what you always did in a gas engine. I use 15W-50 Mobil 1 in all but the 280 SE, where I use 10W30 for the winter. Summer will probably be 15W50. Don't use 10W-40 oils, MB specifically does not recommend them for some reason.
I would only use exended oil change intervals if I were doing oil analysis each change to ensure the oil was still good. The most critical number here is soot accumulation -- and the CH-4 and CI-4 rated oils suspend more safely than the older oils. However, the 606 engines doesn't accumulate soot like the 617 did. I change oil at 6000 miles or so on everything.
As far as driving goes, amazing numbers of people get hooked on Benz after they drive one for a while, even an old ratty one. Nothing else drives quite like a Benz......
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!