If neutral-to-first when stopped is easy then it's not the clutch or the master or slave cylinders.

Could be synchros (change the oil first) but most likely loose/worn out bushings in the linkages outside the transmission. Perhaps not set up right if the transmission was pulled as a engine/transmission unit when the engine was rebuilt. Have somebody "run the gears" while you're underneath to get a good picture of how the linkages move around.

Yes and yes to 1) and 2) - flush the brake fluid first. A running car isn't as important as a stopping car.

You're going to like this car.

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daBenz - 1970 220D