Affirmative, negative, uncertain. I have recently traversed this route, as the surrounding roads are in bad condition. The 19-inch rims result in a harsh ride, and the M-Sport specifications are prone to cracking, leading to air leaks and error codes.
The tyre expert is correct in asserting that installing larger tyres on current rims disrupts telemetry and may affect insurance, suspension clearance, and other factors.
Transitioning from run-flat tires (RFT) to conventional tires will yield a more supple ride. They are less expensive, more readily available, and repairable; however, it is prudent to seek a space-saver or an additional full-size rim for an onboard spare. RFT may perform adequately on smooth, clean roads, but becomes ineffective when driven on flat surfaces. In my experience, you can seal them if you identify the leak first, but not after they have been flattened and driven on.
Yes, you may go for 16" tires, since they will offer the maximum sidewall height, providing greater rubber contact between the road and rim, resulting in a more comfortable ride. You will significantly notice the improvement in ride quality. While you may observe a reduction in handling, based on my experience, the existing speed restriction and the absence of a Nuremberg track nearby render this mostly unimportant, especially considering that vehicles once exceeded 200 km/h on that circuit with 60-70 sidewall tires.
I replaced the staggered 19" run-flat M-Sport tires on my E93 with a $400 square set of 17" tires obtained from the wreckers. During my visit, I acquired a space saver from an E60, a compact scissor jack, and many normal wheel nuts to replace the locking nuts. I assumed that all BMWs utilise the same locking nut; nevertheless, the perpetrators may possess the key, making it still another trivial item to standardise in case of loss.
My primary challenge was locating a pair of 17" rims that I favoured, which also had an appropriate offset (ET) compatible with the vehicle. The 5x120 bolt pattern is prevalent among most BMW models manufactured post-2005, I believe. Numerous individuals designate 18" as the optimal size; nevertheless, in my opinion, it only provided an additional 15mm of rubber in wall height. 16 inches; I had not encountered a set until the 17 inches were installed on the vehicle, but for a 1992 model, they may appear somewhat diminutive. It is fundamentally a matter of personal preference. I transitioned from 225/35/19 8J-et37 and 255/30/19 9J-et39 to 235/45/17 7.5J-et37; as all tires maintained the same rolling circumference, the vehicle remains unaffected.