Merger had no effect on the `97 to `98 C-class.
Interior seating width is most likely due to the addition of side air-bags in 1998.

1998 was a year when slight exterior body change: lower body cladding, trunk lid took effect - which may effect trunk space.

The new V-6 engine was supposedly a better performer in emissions and front crash intrusion. Also the FSS - when to perform service - dash display appeared.

Do more research on oil leaking past gasket on inline six, and harmonic balancer or v-6