If it's a M46/7 manual, you need to remove the engine in order to get to 4 bolts that hold bellhousing to the trans from the inside. Bellhousing is also trans cover/bearing retainer, oil is going to leak and you're going to need new trans-to bellhousing gasket. Fun stuff.
I'm late to the party, but you seem to be well set shop/equipment-wise. Only thing, even though pump dial indicators are exactly what you understood they are and can make an adapter for an indicator you already have, bear in mind they're less than 100$ online and nice to have in their own box. Speaking as someone who always makes "adapted" tools, then the next time spends days looking for them.
As for timing marks on flywheel, you could skip bellhousing saga just by dial-indicating TDC with head removed and scribing a mark on FW and the block. Bear in mind that there are two marks - O|T and a diamond. OT - TDC in german, used for cam-crank timing, and the diamond is for start of injection timing.
Early engines have 11mm head bolts, newer 12mm. Cams are not the same, bearings are spaced differently apart, make sure you buy cam that you need. Myth that Turbo vs N/A cams are different is just a myth. Your head will have cracks between valves, but they're normal, just have the head hydrotested. If it passes and didn't drop a valve, don't bother replacing it. Light surfacing is fine, no matter what Greenbook tells (prohibited).
I have yet to see a bent rod in one of those.