W123 and W126 are great cars. The pre-1985 cars are probably the longest-lasting vehicles on the road.
I wouldnt hesitate to drive my 81 240D or 82 300CD across country tomorrow.
The W126, like yours, is kind of the epitome. The W126 chassis is a little bit newer, offers some better capabilities over the w123, and still has the OM617 engine. Granted, the 85 617 engine has a few nuances like the Klima relay and a different tach sensor approach... i.e. a few very simple computers...
These vehicles were made very strong and with good steel, but they didnt have the rustproofing that newer vehicles have. So rust can be quite common. Sometimes it is repairable, depending upon where it is located. Sometimes it is expensive. But this is the case for any car, from any manufacturer. When rust shows, you need to cut out and weld in new metal.
The W126 did have issues with rust around the rear windshield seal. Rust will form there. Rust will also form in wheelwells like any other car. If seals are bad, rust can form from in the trunk too.