I'm pretty sure the long pause is for the code repeat. I don't recall a single flash on mine, but it's likely. The DME will loop codes until you turn off the key, so that 1224 must be your only code.
I'm betting you're right about the harness. I'd splice it, maybe use a bit of that paint-on insulation and/or fabric friction tape...then disconnect the harness from the DME and do a resistance or continuity test on the coolant temp sensor wires to the DME plug pins. Don't do either test while the DME is plugged in...the multimeter puts out enough voltage to damage solid-state electronics!
I'd also recommend testing the resistance on that CTS while you're at it. I don't recall the exact numbers, but it should be pretty high when it's cold, like thousands of ohms & drop substantially as it heats up, like down to only a few hundred ohms. Some BMWs might have a resistor soldered in-line as well, it was a fix for rough cold-starts on early Motronics.