I've done this job, on an 88 745. I went with an M46, because I was able to get the whole car it was in for cheap. Had to buy a second parts car to get a 3.31 rear, which is an important part of the package. The result is 2500 RPM at 70, and around 31-32 MPG on the highway. You need a 3.31 rear from an 86 or later if you want to have a speedometer. If there are a different number of teeth on the tone ring, the speedo will read incorrectly. You may be able to solve this by swapping the instrument cluster. (but maybe not) Using an axle from a 91, 2 or 3 should avoid speedo issues. Jorrell's idea for a swap sounds like a good one, if you don't live too far apart.

Make sure to get a flywheel with the correct number and spacing of holes for the crank position sensor. There are two different configurations (Bosch and Rex/Regina?) that are not interchangeable.

M46s do exist with the late configuration with crank sensor. Mine came from a 90 744 GLE 16V. These late gearboxes, have a P-type overdrive, considered to be even better than the plenty sturdy J-type.

While the M46 is stronger than the M47, the M47 should do just fine if you drive sanely and make sure to keep plenty of oil in it.

Pilot bushing is for auto trans. That's what's in the end of your crankshaft now. You need to change it to a bearing for either an M46 or 47.

If you use an earlier transmission, you don't need to do anything to plug the speedo drive hole. The speedo output will spin freely in open air. If it leaks, replace the seals.

Careful study of the wiring diagram should show how to get the Reverse lights, overdrive circuit, and even the light on the dash (a green "5") hooked up correctly. You will need to swap the OD relay and a small section of wiring harness (kind of like a jumper---it just plugs in, no cutting or soldering required) and move one wire on the back of the instrument cluster. Sorry, don't remember any more details of this part.