Concentrating on the estate, the issues to check are ride - the car should be sublime, often it is good, but until you have driven in a totally sorted one you will not know what the ride should be. The self levelling suspension spheres will degrade over time and should be checked - when replaced the ride is superb. Ditto front suspension - wishbones and bushes should be checked. Over time the rear washer wiper loom will be damaged and they will stop working, so check they work normally.
As to the cars in general, I would positively choose one with a five speed. The small risk of problems is nothing compared to the daily fact of the four speed being geared for acceleration, not peaceful cruising. I would go for either a 280 or 320, or a 300D multivalve - others say the 220 is fine, but to me I see no pleasure in a 4 cylinder car.
Rust is ever-present, just needs sorting when it appears, check the front wings forward of the wheels, and the jacking points must be rust-free. The front headlamp wipers won't work, and don't worry about them. Wiring looms and chg also an issue. All cars will have niggles of one sort or another, and the engines will perform differently - I have had lazy 320s and really sorted ones, ditto fuel consumption.
I have bought 3 W124s from Nick Froome at W124. He is selling my green 320 estate. He knows his stuff and has been a model of post sales support. Also his cars come with an excellent warranty, and when I claimed for the cylinder head gasket to be replaced by Olly, they were rapid, didn't quibble and paid up within one business day of receiving the necessary invoice from me. I fundamentally believe it is worth paying for one that has been mechanically sorted, with investment in the important areas of engine, suspension and bodywork. The number of good W124s is reasonable, but there are a lot of ones which are showing their age, where maintenance has been progressively neglected. If you see an advert like
this, ignore the verbiage about the W124 excellence - the cars are between 15 and 25 years old. No amount of original excellence will make up for poor maintenance.