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A lot of the problems you have identified my be due to your driving habits or driving conditions: Switches, brakes, suspension.
In regards to the check engine lights, I have the same problem (goes on whenever it wants) on my S70 (and 850 before that)-I just ignore it and trust my instinct (not scientific but it saves my sanity and saves me money).
I have never heard of a wiring issue causing a fire in the engine-I think this may be a fluke or the mechanic doing something weird.
My thoughts on your car is that at 76k, it is a baby. I sold my base 1994 850 a year ago at 160k and the person that bought it is still driving it.
Since your car would not be worth a lot on the used car market I would keep it provided you keep in mind that the A/C Condenser would probably go w/i the next 1-2 yrs at a cost of $1500. If you can live with that expected cost, keep it!
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