1. it was actually in the middle of the 96 model year that you couldn't get a limited slip, BMW decided that only M cars could have them, which I think is a pretty stupid decision, if you decide to swap it though, it's as easy as dropping the old transmission and sticking the new one in if you get a stock ti diff. if you use a diff from another BMW you'll have to swap axles and shim the ABS sensors, but only certain models work, the E30 (84-92 3-series) diff is most common
2. it depends on how well the car was cared for, my ti has 130k, was serviced at the BMW dealer up to when I got it and still runs strong, it's a huge plus if they have service records with the car
3. not much you can do with the 4-cyl., Metric Mechanic has some good internals but they're not cheap, if you have an extra 4k laying around there's also the Downing Atlanta supercharger kit which quite a few members have, it's SMOG legal so no worries in California. Dinan offers a premade tune for BMWs, but you can also have a custom tune written
welcome, hopefully you can find the ti you're looking for