The first problem is at the very least, if it's low, then it must have
a leak that needs to be found and fixed.   A while back, R12 was way
more expensive, so it made more sense to convert.   More recently,
I've heard that it's come down so that it may make more sense to
continue using R12.   When you switch, you do lose some cooling
capacity, maybe 20% or so.  In my 300SD, it made a noticeable
difference.  Given that it's a car that is new to you, I'd take it to
a good repair shop to find out exactly what it needs.

I don;t have any direct experince with the O2 sensor, but my
experience with most aftermarket parts has been that they are OK and
for the price diff above, I know what I would do.

its for a 91 560SEL I bought on