Reddit reviews DKMUS Car Speakers Adaptor for BMW 3 Series E36 1991-1998 Rear Speaker Adapter 6"x9" Rings Brackets 1 Pair

All E36s have the same sheet metal, so replacing the speakers should not be hard. Buy a 4 channel amplifier, a set of 5 1/4" component speakers for the front and a set of 6x9 speakers for the rear.

I have these adapters. They work perfectly with the stock screws and mounting holes in all E36s- regardless of factory speakers. 6x9s are the way to go for the rear. More surface area on the speaker cone means the capability for a bit more bass output on the highway and so on. Also, 4" drivers are hard to find and not worth the trouble. Link to adapters:

https://www.amazon.com/dp/B01AZOZRLM/ref=cm_sw_r_cp_api_zrzCybCMQ31D1

This amplifier will fit on an 1/8" sheet of ABS plastic where the stock amplifier location is (you may or may not have a factory amp):
https://www.amazon.com/dp/B00S7G1TPO/ref=cm_sw_r_cp_api_tHzCybJXA9DDS

You will need a line output converter if you want to keep the stock head unit- which it sounds like you do. This goes in between the head unit line level/speaker outputs and the amplifier inputs:
https://www.amazon.com/dp/B00I4EF1BC/ref=cm_sw_r_cp_api_XLzCybRKTEWY2

Speakers are a matter of personal preference. I'd recommend you go to your local big box or car audio shop and listen to the board. Pick the 5 1/4 and 6x9 speakers you like best- any mainstream set should fit with little effort. If you don't feel like looking, here are some would-please-everyone suggestions.

These speakers could perform nicely in the back:
https://www.amazon.com/dp/B00BF6HWFY/ref=cm_sw_r_cp_api_bJzCybAXEKGZV

These will fit in the front (hot glue the tweeter into the factory tweeter basket on the door panel):
https://www.amazon.com/dp/B002X786XQ/ref=cm_sw_r_cp_api_MKzCyb1CT1SCX

If you want a direct aux input, you can modify the stock cassette head unit to accept an aux input with nothing more than a butchered aux cable and a soldering iron.