Well the 560 has around 90lb-ft of torque more, about 1000rpm sooner. The difference is night and day. It can accelerate with ease at 2000-2400rpm while the M103 struggles down there. Fuel economy between them is very similar too, I also poke around town in 3rd gear with the M117. Weight difference is minimal as the M117 is an aluminum block while the M103 is iron.
The M103 is a fine motor but it really does not belong in the LWB and should have been offered with a five speed manual. 300SE + five speed manual would be fun!
The M103 + W126 is also geared totally wrong with the second gear start and 3.46:1 rear diff. First gear start and 2.88:1 seems like a happy medium, about 3000rpm @ 70mph.
My 735i with a manual is a totally different drive.
If you have never done a valve job on your M103, you are losing noticeable power there. I finished mine up in January or so and the difference is nice. Power is more linear... mine has 280k on it.