I agree with a lot of that. The E39 and the E46 are very different cars even though they're from the same general era. While it's not exactly your M5, I drove my father's E39 540i occasionally for years (he's owned it since new, almost 18 years old now). It's a fantastic long distance car, incredibly comfortable seats, quiet on the highway, has sufficient low down torque (320 ft-lbs) that is very accessible and makes passing easy, and a great engine sound. It was very capable in the bends, definitely more power than I'd ever need on the street. It was my performance benchmark. And I thought it had the best steering feel but all I had to compare it to were econoboxes, my inherited C4 Audi S4, my sister's Jetta, a friend's Saab 93, another friend's Mini, my mother's Volvo S40, etc. Then I got my '03 330Ci and although it lacked the torque of the 540i, it felt nimbler and more focused. Now that I'm in the ZHP, it's magnified. Stepping out of the ZHP into the 540i shows me how much more poised the E46 is than the 540i. It's got a much shorter ratio steering rack (I think the non-ZHP is 15.4, ZHP has 13.7:1, the E39 540i had 17.9(!), and the E39 M5 had 14.7) and weighs a lot less. The 540i has a fat ass that it likes to shake if you give it the chance. I didn't know the E46 and E39's used different steering mechanisms, but it would help explain some of the difference in feel.
All that said, they're different cars for different things. I am incredibly envious of your new (to you) M5. I've ridden in the friend of a friend's and it was an absolute hoot. Maybe not as precise as our ZHPs, but in some ways more exciting. And that V-8s