First off, welcome!
Second, to adress some of your questions.
Let me add also, that BMWs are based off bodystyles and years. The years that you are looking at in the 7-series is considered an e38. I LOVE the e38 bodystlye.
The difference between a 1996-1998 740i and 740iL is length. The "L" stands for "Long-Base"....if you compare a 740i and 740iL side by side, the rear passengers doors will be shorter or longer depending on which model you choose. I think the interior might be a little bit more roomier. I can't remember.
Body style? Yes, they all have the same body style.
740i/iL from the years 1994-1998.
BMW only gave a change to 1999-2001 of the 7-series body style.
In 1999, the 7 series received a small facelift: the headlights and rear lights were changed, and there were some minor changes in the interior.
Parts changed from a newer 7 to an older 7? I think they only can be changed within their years and models. (so within the e38 years (1994-2001). And maybe with bodystyles....so maybe just 1999-2001 can be changed, and 1994-1998 parts can be changed. Not sure if you can mix and match.
Engine wise, all the models you are concerned about all have the same engine with the V8. BMW made a 750i/iL from 1994-2001 and those have a V12 engine. The 750i/iL have 40 more hp (326).
Here is my PERSONAL opinion:
I highly suggest getting a 740i/iL from 1999-2001 with the sports package. They are more sporty and have a sportier suspension. I think they look and drive better too. I think they have less problems than a 1996-1998 would have. But don't take my word for it. Go and drive several different years and models...1996, 1998, 1999, etc. and see for yourself.
Side note: You can tell if it has the sports package by the steering wheel, it will have an "//M" emblem on the bottom. Also the wheels, if they are in a star spoke pattern (like my picture at the bottom, those are sport wheels)
Good luck! Any other questions, feel free to search the site and ask ANY questions, we are here for YOU!