theoretically, yes, more pistons will help with braking. multi-piston caliper works more efficiently and transfers a larger area of friction to the rotor because pressure is exerted equally on both sides of the rotor by a series of individual pistons working together. There's a lot of science and engineering required to formulate the most efficient ratios between the fluid moved by your master cylinder to the number and size of pistons in the brake caliper. Virtually dozens of companies sell multi piston disc brake calipers for performance applications. Some work great and some do not work any better than the stock calipers.
don't get me started on the crossdrilled rotors...
Cracking is limited mostly to drilled discs, which get small cracks around outside edges of the drilled holes near the edge of the disc due to the rotor's uneven rate of expansion in severe duty environments. Manufacturers that use drilled rotors as OEM are doing so for two reasons: looks if they determine that the average owner of the vehicle model will not overly stress them; or as a function of reducing the unsprung weight of the brake assembly, with the engineering assumed that enough brake rotor mass remains to absorb racing temperatures and stresses. A brake disc is a heat sink, so removing mass increases the heat stress it will have to contend with.
how much are the e34 m5 nurburgring rotors/calipers versus e39 m5? i think the e39 m5 setup with a nice set of pads will do wonders.