First welcome to the forum! Nice car to.
Now if the W124 is like the W126 their is a drum brake inside the rear disc's, thats your parking brake. My guess would be that the shoes are worn down and shot, Fastlane could sell you a kit for $36.
Now as to the cheap rear pads if they don't make noise I wouldn't worry about them, MB rotors are soft and don't last long either way. If it bothers you though get a new set of rear pads their cheap.
A few other tips: why your back their replace the soft brake lines if they havn't been done in the last 10 years. They get old and will start to get soft. Their only $10 each so do all 4 and change the brake fluid.
Change all of the fluids and filters, do a search if you have any questions they have all been covered. Do a search on oil and sit back for a days worth of reading!
Now you have a 603 diesel their a sweet engine but don't ever overheat it. Never, never, never let the temp get much over 110C. It could cost you $2k+. The original heads were numbered "14" they will crack if overheated. To check your casting number it is stamped on the head right above the 2nd intake runner (I think). Their will be a long MB part number with either a 14 in it or higher. The higher the number the better 22 is the latest. Also make sure to use only MB coolant, flush it right away if something else is in their.