What you smelled is likely the compressor clutch slipping. I expect the compressor is locked up. When you engage the a/c, the clutch activates, but just slips on the pulley, which continues turning.

These cars do not have the aggravating speed comparison circuit, so there is no instant cutout. I can't recall the details of what has replaced it - some type of heat sensitive circuit which eventually burns out. I think SteveB or MBDOC described it at some point in the past.

I fully expect the compressor needs to be changed out.

Can't address the flickering lights - might be time for a regulator?

- JimY