Hola,
I am just returning from a 5 year stint in Mexico, I lived in the D.F. but still have a house in Morelos. Yes, Spanish will be very helpful. There are actually some very good mechanics in Mexico, but be very careful as many of the small shops do not carry insurance and if your car is stolen while under their care there is nothing you or they can do.
Dealers are not bad either. I have not checked the MB hourly rate in Mexico, but I can imagine that it is less than in the US. Parts, however, will probably be much more as they are imported and will be subject to high duties (maybe 25%).
You are right that the roads are great - I have driven all over Mexico and found it to be pleasurable - especially when you get away from the boarder. Be careful of the federales, however, as they will give you a citation for speeding if it is gross and generally can't be bribed. Given that, I regularly drive 140-160 km/hour on the autopista without any issues.
If I can be of any help let me know - I have a lot of friends in Mexico and some that can be trusted in a pinch.

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John Gillespie
1988 560sec - 192k miles
2006 CLK500 - 40K miles
1995 E300 - 202k miles