Sorry to hear about your accident. My 89 300E was rear-ended not too long ago, not by a drunk woman, just by a cell-phone talking moron of a woman. She hit me doing about 60. I was stopped at a red light.
Long story short, quote on repairs was over $5K. Insurance wanted to write the car off due to age. I politely - key being politely - and firmly argued that although the car was old, it was in mint condition and I wanted it repaired.
They sent an adjuster to see the car and he agreed with me. They fixed it beautifully and it's been fine ever since. Insurance co. hooked me up with a nice Volvo S60 for the duration of the repair and my rates were completely unaffected.
So I'd say fix it if you can. They'll only give you the blue (black?) book value if it is a write-off, so probably worth it to you to fix and keep it - looks like a nice W124.
Good luck!
EDIT - Only other piece of advice - get it fixed at the best Mercedes shop you can. I had it done at the largest dealership in town. They did a great job. They did have to adjust the frame slightly, and they were the only shop in town that had this bizarre-looking machine designed specifically for working on Mercedes' frames. My car sat hooked up to that thing for a few days, as I understand, in order to align the frame properly. As stated, this was a couple of years ago and my car looks and drives perfectly today.