Just as you mention your old 740 and the rusted body at 485KMs... it clicked; you mentioned that when we met at the End of Summer Event last year! I never realized.. nice to put name to face to car.
Good to know the rear quarter was an accident repair... From my experience, bubbling like this is a pretty nasty sign of the metal rusting from the inside, out... and what you see on the outside is eye candy compared. As for the other rust, just compare it to other 18 year old vehicles on the road, could be a lot worst. The factory paint seems to hold up really well though; mine is littered in various scratches and a few dents.
My old '81 242 with M46 was terrible for going into 1st gear when the thing had warmed up. I had to wrestle with the shifter and even had some cars beep after the green light (I hate riding the clutch sitting idle). Rest of the gears were perfect and I did ~15k KMs in that thing.
I hear ya on the manual swap... don't have the knowledge, and I'd always try to buy to my spec before even considering the feasibility of something like this. I love manual transmission, but a stock 240 for commuting... how much 'fun' do you expect to have in it!
I retro-fitted cruise control to my '91 using a '90-'93 kit I pulled at the junkyard. Even if you could only get a kit from an auto, I'm sure it would be easy to create a new pedal plate and modify the loom for the clutch... especially when you already have a manual car you can copy from!
You probably could do better for $2k. You know yourself, if you really wanted that car, it would be sitting in your drive already! I wouldn't be surprised if the seller gets in touch with you in a few weeks time. It's hard holding out for a nice one!