I thought the 325is has a slightly (10mm lower) suspension, because the S would represent a sport package. To answer your questions:
1. Not sure on price of finding a replacement seat but you can look for some in good condition, try e30tech.com. All of the seats should be very easy to replace.
2. The iS lip should just snap right on, you might need some new clips though as older ones might have been broken.
3. My above about a sport package should allude to that.
4. If you don't have documentation on when the timing belt was last changed I would suggest you do it right away for extra piece of mind. Not sure on cost as the m42 has a timing chain so I don't have to worry about timing belts.
The car you posted doesn't look half bad and for that price it is probably a good deal. Looks like a tear in the drivers seat, a club of a shifter, and like the muffler is hanging a little low, but probably something a fresh hanger or two can fix. Good luck and I would offer 1600 in hopes of getting it a little cheaper (just means more money for mods/maintenance).