http://www.m42club.com/forums/showthread.php?t=5 first post has an extensive checklist.
I couldn't evaluate suspension for you. An informal check would be to have someone drive the car and you follow from behind to see how straight it is and if there are any wheel wobble issues.
Repainting -- many shops won't touch because of the age of the car. If you have access to a competent high-school vo-tech program and can be patient, that's one approach. You can search on forums similar to this one about using Maaco (pluses, minuses, advice) and make up your own mind from there.
When you talk about console, do you mean the dash (somewhat expensive and labor intensive), the panel holding the radio and AC/heater controls, the center console (window switches, front ashtray, gearshift lever) or rear console (parking brake and rear ashtray)? The further back you go, the easier they are to work with. The interior light fix ought to be straightforward.
Unless a mechanic competent with BMWs can "bless" the reconstruction job, you'll always have that cloud over your head. An auto insurance adjuster would be another source of perspective.
An E30 parts car (example, everything works except it has a blown engine) would go for about $500. As you describe it, this car is one step above parts car status, although passing a state safety exam helps a bit. If it were me, I'd pass on it.
Good luck in your search.