The way I did it in my W210:
Analog Cell phone update - 1998 W210
I used a Parrot kit to handle phone calls (handsfree profile) and streaming (A2DP profile).
The Parrot has a microphone and a small (approx. 10 W/ch) built in stereo amplifier, and a pair of line level outputs.
In a W210 the two dash speakers are dedicated to the cell phone. On the W124 the factory cell phone audio was shared via the dual coil speaker with the audio system on the left front dash speaker only.
If it was me (and I did plan to do this to my W124 wagon before I sold it) I would get another dual coil speaker from a W124 in the JY and put it on the right front to match the left front one. Use the Parrot amp to drive the second coils on these speakers. The primary coils continue to the audio amp.
Get the stock radio modified by Becker to obtain the aux input. They will send your radio back with a 1/8 inch jack interposed in the audio stream between the FM radio and the input to the power amplifier. The jack has switch contacts that when the plug is removed, the audio passes through. If a plug is inserted, the audio from the remote device replaces the audio coming from the FM tuner. This jack is on the end of a 4-conductor shielded cable.
You will want to remove this jack and use the 4 wires in conjunction with a relay to switch between normal radio operation and streaming. I was going to trigger the relay using the antenna control switch, placing the antenna in the 'down' position flips the relay to streaming operation mode.
The final piece of the puzzle is to trace out the muting lead from the factory cell phone controller into the radio. You will use this relay combined with an output of the Parrot to mute the radio while you're on the phone.
The Parrot model I used has a remote display head that I was able to integrate into the W210's built in cell phone controller. I think the W124 had a similar arrangement on the upper control panel. Not sure if you will have enough room to fit that display up there or not. The actual control device is a little remote that they expect you to strap to the steering wheel. I ended up using double stick tape to hold it to the lower control panel area in a blank spot, it almost looked factory.