Hmmm, lots of questions.

There is no such thing as an X5 tow package. You don't need air suspension to tow. There is an OE trailer hitch that includes reinforcements where it mounts to the unibody, and an OE wiring harness. Both would be recommended. You can install the hitch yourself, the instructions are on this site. The wiring harness plugs in easily. There is no hitch wiring present, even with the trailer wiring kit, that remains a DIY job. There are instructions on this site, and you can trigger the trailer module (Prodigy, or similar) off the lighting control module (LCM).

It has 17" wheels, not 16". They were standard.

There is no such thing as an SAV, that is a figment of BMW's advertising department's imagination. It is an SUV.

I don't think that the NV125 transfer case is stronger than the later ATC transfer case, with x-drive. It does have the advantage of no actuator motor, if you are concerned about that. The NV125 is the same as the NV124 that came in an E46 3 series, but with a chain instead of gear drive.

The 2003 is rated to tow 5000 lbs with the automatic transmission, 6000 lbs with the manual transmission. It can tow 5000 lbs fine. You won't be racing up mountain passes with a full load, however. 225 hp is just that, 225 hp.

I am not sure that trading an unreliable older Tahoe for a 2003 X5 makes sense from a reliability standpoint. They likely aren't too different.

Good luck.

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2007 X3 3.0si, 6 MT, Premium, White

Retired:
2008 535i, 6 MT, M Sport, Premium, Space Grey
2003 X5 3.0 Steptronic, Premium, Titanium Silver
2002 325xi 5 MT, Steel Grey
2004 Z4 3.0 Premium, Sport, SMG, Maldives Blue