I have owned both a 300E and 500E W124s. The 300E is a wonderful all around car; well built and reliable. The 500E is altogether something different. The 500E is a hand built (by Porsche in Rosa Blau plant) and shows it in the fit and finish which significantly surpasses not only the 300E but any contemporary Mercedes including the S and SLs. The interior is the 4 place sport or coupe interior and of a higher quality with more support in the seats. Several modifications were made to the M119 5liter engine resulting in greater torque and power. I owned an NSX and a 500E is more fun to drive although it obviously will not handle as well. Its comfortable but rock solid.
The succeeding Eclass (210) and the current S class are simply not built to the standard of the 124s. Ask any Tech; don't just look at the interior and exterior fittings; ask about what they are like INSIDE when you pull the dash to change an evaporator. If not abused it is possible to keep or return a 124 to showroom condition. The Master Tech at my Dealer would drive my 92 500E over anything else made by Mercedes.
You cannot go wrong with a excellent condition 300E or 320E as an everyday car but the 500E is bliss. I plan to die with mine.