UPDATE:After a very kind M42 Member REDIS91 sent me a used CPS to try out, I can HAPPILY say the car STARTED!

When I received the borrowed CPS sensor, before installing it, I spec'd it out using my multimeter and it read a solid 524 ohms and I did this merely for comparison sakes against my original CPS.
As I previously stated above, when I tested my CPS IN the vehicle, I was getting a reading of 1180+ohms (the multimeter kept ticking off digits slowly). When I completely removed the original CPS sensor from my vehicle and re-tested it, it abruptly read 700ohms, then excelled to 1400+ ohms and kept going upward from there. I also visibly looked over the outer casing and found a very small crack at the "head" (or probe) end of the CPS. This very tiny crack was right at the junction where the wires go into the CPS head. After installing the used/borrowed CPS from REDIS91, the car started w/o issues.
I am still minutely puzzled as to why the DME never picked up a fault code for a faulty or non-functioning CPS sensor. When I had my prior 95 M3, the CPS died on it too, however, the E36 DME did register the correct fault code for the failed sensor. The only thing I can think of is the E36 DME is far more advanced and sensitive to picking up such issues than the E30 DME. The other thing I was also thinking was since the CPS was dead and was not able to register a spark, maybe that is why my 318ic's DME was not picking up the fault code, since it was not registering back a spark to the DME...??
I am greatly thankful for the "loaner" CPS, as this definitely helped to 100% confirm without a doubt that the CPS was the problem. Even though I did all of the testing as outlined in this thread and I had also used the BAVAuto newsletter as supplied above by REDIS91, I was still not 100% positive the non-start was the CPS sensor due to not seeing the fault code for it from the DME. Many of you were correct about the possibility of the CPS being bad and I want to thank EVERYONE who helped out in this thread!!!
I have a brand new CPS on order and coming from bimmerparts - thanks to Chris @ bimmerparts.
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BONUS:I have never seen it done by anyone and since my original CPS was "dead", I figured I would dissect it. Here are my observations below (I will update this thread and pictures of the dissected CPS will be posted at a later date):
1) entire CPS sensor is vacuum molded in a black casing which protects the internal wiring. All of the internal wires go from the plug to the head.
2) outer black casing between plug & head is cut away to reveal a clear cellophane layer
3) below the clear cellophane layer, there is a very fine multi-stranded mesh wire that conforms and surrounds the next layer of material. This multi-stranded layer of fine wire is exactly like that found in a coaxial cable.
4) below the very fine multi-stranded mesh wire, there is a foil layer
5) below the foil layer, there are (2) wires - 1 black and 1 yellow. Intertwined in & out of those wires are (2) smaller, very thin black wires, but these wires do not have any copper centers. Looking online to determine what type of wires these could *possibly be*, I found that these might be Carbon Suppression Conductors. A carbon suppression conductor consists of a substrate of fiberglass and/or Kevlar over which high-resistance conductive latex or silicone is coated, and functions by reducing spark current (by resistance) to provide suppression. This is the same type of wire or material found in spark plug wires and other types of sensors. If those 2 smaller wires are not carbon suppression conductors I don't know what else they could be, or what purpose they serve.
6) at the plug end, the plug is molded & encased in black plastic. Inside of the plug there are (3) metal tabs. These tabs are the same tabs as seen at the open end of the plug of which you would probe for resistance. Tab 1 had a black wire soldered to it, Tab 2 had a yellow wire soldered to it and Tab 3 had the fine multi-stranded wire soldered to it.
7) The head or probe end of the CPS is encased by a thin metal layer that resembles a "can". This part of the CPS when operational "reads" the teeth on the crank as the crank is spinning and relays the info back to the proper relays & DME for spark & fuel. The metal can is thin and can be easily dented if hit or dropped. The head of the CPS is also magnetic, as I was able to pick up lightweight tools and other smaller metal objects with it. Once the metal can is cut away, it reveals the core of the sensor. The center of the core contains the magnet. The first outer layer of the core is an off white fabric. Under this fabric there is very thin brass wiring that is multi layered and wrapped numerous times around the core. The base of the core (where the wires are inserted to it) is black and is sealed w/ 2 rubber o-rings.
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Neat huh?
Now, based on my observations and findings with the CPS dissection, IMO, there are (2) possible internal failure points:
1) The second layer under the outer casing is the fine multi-stranded coaxial wire. This wire if breached or if any single strands are broken can render the CPS inoperable OR you may get incorrect resistance readings above or below the correct specs for this sensor. Based on the fact that most 318's that are still on the road, some still retain the original CPS sensor. This sensor and it's materials due being 18-20yrs old and most having 80-100k+ on them are susceptible to underhood temp cycles and weather conditions which can and do make the outer casing very hard & brittle. IF this casing is damaged during an R&R process of any components around, near it or by dealing with the sensor directly or IF the casing is bent in a way it was not intended, there is the possibility of breaking or damaging the internal fine multi-stranded coaxial wiring. Any such break in this wire will damage the sensor. Remember, if ORIGINAL, they are OLD and can be easily damaged, so be careful when R&Ring.
2) IF the (2) small black wires found in the main wire casing are carbon suppression conductors, these can fail. These type of wires are cheap to make, they are found in multiple brands of spark plug wires and other types of sensors. These wires do their job extremely well while the conductor lasts. The conductor can fail (just as spark plug wires do) and this too will render the sensor either inoperable or show varying resistance when tested. Spark plug wires are limited life service parts depending on age, mileage accumulation and underhood temperature cycling conditions.
Based on my findings with the resistance/ohms readings of my original CPS and the dissection, it's safe to say that a CPS sensor is a limited lifetime part that CAN FAIL without warning and should be replaced based on age/wear/resistance readings.
Hopefully this thread is and will be helpful to others that are experiencing non-start issues, as there are MANY test methods covered, outlined and performed in this thread which will be beneficial to the "do it yourself" mechanic.