Do I want more acceleration, throttle or torque?

 set of DENO TWIN TIP IRIDIUM spar rk plugs and REALIZE that you CANNOT use VALVOLINE or other CHEAP oil in there! You MSUT use only oiol marked LONG LIFE< LL-02 ONLY! Thsi means MOBIL ONW 0W-40 AMSOIl for EUROPEAN engines, TOTAL energy oil for BMWS or my favorite PENNZOIL ULTRA EURO that gives a warranty to 500,000 MIELS

You can get a lean engine code from running on E85 gasoline. Doesn't hurt the car, the O2 sensors just pick up more oxygen in the exhaust stream. Even "Flex Fuel" cars and trucks often get this code when they run E85. You can't expect a lot of power from a "3" series BMW. It's just a more expensive Volkswagen. I'd just worry about miles per gallon and not "power". 

What's your average 0-60 time? That will tell us whether you're throwing good money after bad. 

While a front 02 sensor can cause that code it's usually a bad MAF sensor or a vacuum leak on European made vehicles. Before throwing parts at the problem you should put a mechanics scan tool on the vehicle and read all the engine data to determine if the MAF sensor or one of the other sensors is out of spec. 

A failing cat will certainly reduce performance. It halved the power on my Escort XR3i.

Once you have sorted any issues consider adding a performance chip to your car. Chips can make a significant improvement in power and torque. Google 'Chip tuning' and 'Car remapping'.

You will need a scanner to check if the engine is running rich or lean.  Check O2 sensor readings and long term fuel trims when the engine is running and in closed loop.

If the exhaust smells like gas, it is likely running rich due to a clogged air filter, a bad O2 sensor heater, bad wiring to the O2 sensor heater, a bad O2 sensor heater fuse, an O2 sensor that is stuck lean, a stuck open fuel injector. a stuck open thermostat or a bad ECT sensor.   A bad MAF sensor  can also cause a rich condition.  Clean the MAF sensor with a MAF sensor cleaner and see if it fixes the problem.

If the car has an external fuel pressure regulator, remove the vacuum line to it when the engine is off.  If you see fuel coming out of the fuel pressure regulator where the vacuum line attaches to, you likely found the problem.

If the engine is running lean, check for a vacuum leak with a smoke machine.  Check for fouled plugs and check for a weak ignition.  Good luck.

My first guess would be an ignition fault, one or more cylinders not firing at all.

That would cause unburned fuel and the smell, plus general bad running.