Japanifing a thread related to german automakers? Seriously?
If your dad is as enthusiastic about german cars, get one for him. He deserves it tbh. Let him enjoy something he loves.
Regarding your queries, here's what I can tell you.
1) DHA is one of the safest places. I lived in phase 2 for 6 months and the place is full of European/american cars, most of the time without security protocols. Just regular people driving their cars. If the car will be a weekend fun driver, I doubt it will attract unwanted attention. Lahore is full of these cars. So is Islamabad. Hell, even Peshawar has a whole bunch of these cars. I'm sure every city has them. There was a mention about rear leg room not being great. True. But isn't the car for you parents to enjoy? I mean, its not gonna be a family hauler now is it?
2) The traffic situation is bad everywhere. Even in Islamabad, the one place I actually feel easy driving around, things are taking a turn for the worse. About lahore, well, DHA is pretty easy for the driver. The bike problem is huge though through out lahore. What I did notice was that most people kinda stay away from these type of car's at stops. So you shouldn't worry too much. But its always better to stick to the right/left lane. That way, one side of the car is protected.
3) Every car looses value over time until they become a collectible. Don't buy a car if you are already planning on selling it before you have even paid for it.
Best of luck.