If you're in an area without many E36 around, welding is the only decent option. I've had good luck with frame and chassis welding over the years, I'd trust a reputable mechanic with mild steel welding like that subframe. I would suspect that a significant front wheel impact could cause damage like that, especially given the long lifespan of these cars. A few decades of metal fatigue and corrosion. BMW also tends to save a little weight on structural components compared with other manufacturers.
My E30 front subframe is solidly mounted to the chassis. No rubber except for the engine mounts. I'm 99% sure yours is the same way. The rear subframe is a completely different animal, rubber mounts all over. Perhaps that was what he was thinking about? We're pretty lucky with rust-free spare parts here in the USA. Shipping is expensive, but I've had luck with eBay salvage yards like Vines (in Georgia, USA?).
Hard to tell if that engine mount is compressed. They slowly collapse as they age, then the engine tilts a little from its original position. I wouldn't think that could cause exhaust cracking, but it's possible.