Size wise the IS2/300 is basically a rwd Focus. The LS is a much larger proposition. And their interiors are significantly better than the '90s offerings.
I could never decide which S Class to go for when I started driving (and went with a MK2 Granada because that obviously made sense
)... I still really like the W116, traditional old school Merc, but the W126 that followed offered more toys in a more modern body. Then again the W140 offered yet more toys and a significant improvement in drivetrains.
The W220 S280 that I got just before TCV was my first S Class and ticked most boxes.
I think the W221 S Class is probably the perfect generation. Although, if a rust free W116 popped up with knackered Bosch CIS, then it would make a good candidate for dropping the M113 V8 into
but I digress
I don't think there's such a thing as the perfect car, but there are those that are the right car at that moment in time for a person's specific needs. Trouble is the Omega was almost too good for its own good and the only genuine alternatives are the 5 Series or E Class, but they're both different in what they offer.
If the XJ is by and large sorted for a couple of years, then you may as well hang onto it. New cars aren't anything like as durable as 200-2010 ones, and unfortunately for JLR, Ford was a strong advocate of the idea of using plastic for anything that could be heatsoaked and the newest stuff is unnecessarily tech heavy and not designed to last. There's a reason you can't get the latest software on an older iPhone and cars are no different.