Yes. The bluetooth kit that most X5 owners talk about is the ULF module retrofit kit. This is the one that people reference as the 13th gen ULF module being the latest and the best. You can easily connect the phone to the system without the cradle. The cradle is only an option used to charge the phone and route the antenna to the roof.

I would say that more than 75% of people using the BMW ULF system do not use the cradle, but it is an option...

No problem on your business CD setup. It works great in your X5, and is a very good upgrade to have. Now that some states are requiring you to use a hands-free system while driving, it is also considered to be a very safe upgrade as well.