The Ole E12, Great bulletproof cars. I've owned three of them. Got both kids thru high school. Can't help you with the clutch because mine have all been slush boxes. Go to Firstfives.org for more info on the 3.5 conversion. You will find plenty. I never consider the swap myself, the 2.8 is more than enough in the lighter body plus the suspension will need to be brought up to snuff to really handle the extra power. For the money some spend to do it, I can get a nice used e30. When I want to go faster, I just crank up the 535i.
Willobmw
1990 535i
1981 528i 88k original miles
1975 2002