Re: 19 X 8.5J offset 35 or 38 can fit?
Depends on yourself. Questions to ask yourself:
1) Where do you want your wheels to sit? Right at the edge of your fender or inner a bit or very in like stock? Usually people want as far out as possible for better handling and looks.
2) How far out?
Offset > 40mm no rubbing at all, not the best look though.
Offset 38mm depends on your suspension and camber and driving habit.
Stiif suspension + aggressive camber + aggressive driving = no rubbing = no need to roll fender.
Soft suspension + not aggressive camber setting + drive aggressively = will rub occassionally
Soft suspension + not aggressive camber setting + non-aggressive driving = won't rub
Offset 35mm looks the best but will need to roll your fender quite a bit. Confirm rub.
Overall, I would say 38mm is just right for an E46 SEDAN. Good balance of function and looks.
All the above statements are based on 19 x 8.5J rims only. Wider rims than that will need a lot less aggressive offsets + rolling fenders to fit. Quite rare to find those unless you custom make your rims.