Wait a second, I have detailed more than one e36 and they were all clearcoated, even the 94 that I did recently.
Is it possible that it was either a repaint or that the clearcoat was so damn nasty it turned your pads black? Did you clay before polishing?
I once did a red mercedes that was clearcoated(1998), the paint was so bad my pads turned dark brown!
Either way AMAZING :goodjob correction for your first time, and if you want to wetsand you can probably ditch those etchings for good. Just make sure you use something real fine like 2500.
On a side note, I really really like e36s, pretty much my favorite BMW when you update them with hella projectors (not cheap ebay ones, the hella ones look OEM) and some (non ricer) LED tails.
Oh yea and also, all e36 headlights I have seen were glass, yours may just not be clear from many tiny stone chips.