I agree with the above two recommendations about checking your engine wiring harness. It is surely bad. They are all bad from 1993-1995 on 3.2 liter M104 engines.
It may (or may not) be causing some of your problems.
However, I don't think the engine wiring harness is causing your idle to fluctuate. It can be one of three things:
1. vacum leak: could be a problem with a vacum hose that has come loose or is not attached properly. You could also have a leak at the intake manifold gasket.
2. Mass Air Meter - A bad mass air meter will allow the idle to hunt up and down.
3. Throttle Actuator - They have potentiometers that wear out over time. The wiring harness for the actuator also goes bad for the same reason the engine wiring harness goes bad - flaking insulation.
2001 E430, Bourdeaux Red, Oyster interior.
1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".