'98 E320 Wagon--electrical gremlins
 

#1. 'Defective lamp' comes up when I brake, but all brake lights work.
I did just replace a burnt out brake light bulb, off the shelf from
AutoZone. It used to be the case ('80s era) that one had to buy
such bulbs from the dealer, else the cruise control would fail, which brings
me to

#2. Cruise control does not function when headlamps are on. I did
recently replace a headlight bulb, again off the shelf. What gives?

Cheers,
Richard

#1 - Check your back up lights and license plate lights. If those are all good the car may be reacting to the bulb that was recently installed.

#2 - Cant help.

Brake lamps should be changed in pairs, with both being the exact same product.

Can't help with the Cruise Control, but take a close look at the contact area where the stop-lamp sockets touch the tail-lamp lenses. 210's are notorious for over-heating in this area.

Seconded. I would say that contacts/grounds are suspect in both cases.

My 93 300e 3.2 got same problem after I changed one of my break lamp (warning light went off when hit break). Put the new ones on both (same number) and never happen since.

well known problem,you need to replace the right rear tail light assembly.the plastic melts from heat and the metal contact surface warps and won't make contact.the assembly is not expensive.