Owner's psychology counts bigtime
Pentosin and ATF = Power steering fluid.
Prestone = Coolant.
You got this mixed up, even though the posts were relatively clear. You're being too stressed up about this car. You're probably going to make poor decisions or poor/incorrect observations, or even miss out things.
So please, just chill out. You've got a great ride, a rare 1995 540i, with fixable problems. That it came with problems is not unusual coz you didn't fully check it out with your own mechanic before you purchased it - that's a mistake. However, the problems seem to be fixable - O2 sensors, valve covers and insufficient power steering fluid, perhaps a leak there. The guys you bought this from will pay to fix (or foot the bulk of the cost ) if they didn't declare all this up front to you.
You don't need to flush things unless its really bad and the judgement for that is some distance away so you can relax. Don't assume that things are going to get from bad to worse. I realise that its difficult to be confident about a car which has a tricky engine, but once that's sorted out, you won't be able to leave the cabin, it will be that good. That's what most people on the fest feel. So take a step back, forget about the car, and come back to this tomorrow morning with a fresh pair of eyes. You'll be far more effective and your car will thank you for it. That's my advice to you.