As for your stereo, it's a standard single-height slot. There's a stock amplifier in the left-rear of the trunk. See http://www.bmwe34.net/E34main/Upgrade/Stereo.htm

Good tips there about wiring if you're just adding a sub & amp in the trunk. Search the forum for other threads regarding creative ways to wire the headunit if you're getting one - pretty much every head unit has powered outputs, so it's "if"y to run powered outs into line inputs on the factory amp. You might need to bypass the factory amp and wire the headunit straight to the speakers.

As far as the upholstry... I don't know much about that.