Firstly, book and go to an MOT testing station (council run ones, usually), and see if they fail the MOT on the rims. Hairline cracks (which is what these threads usually involve) I'd be surprised if they were an MOT failure, as they aren't really detectable by an MOT station. If the wheels have got huge chunks out of them, then it's a different matter, of course.

As to what size you can go down to, the answer is ... it depends. The 'new' F30/F31 3 series, IF it's got the M-sport brake pack, must be 18" rims minimum to clear the brake discs and calipers. If it doesn't have the brake pack, then I believe virtually anything from 16" upwards. Yours must be the old E90 based model (or else it would be a 420d convertible), no idea what brake pack options were on those, or what yours could be fitted with.

Obviously, 16" will give a lot more comfortable ride than 18", or even 17". But then again, I assume you bought the M sport version of the car because it looks sporty. 16" wheels will totally change the look of the car, so you might want to think about that a bit.

As to the make of wheels - well, if you fit a non-BMW wheel, then you'll need to inform your insurance company. Lots of BMW genuine wheels on the Bay, or at any scrapyard, though. If you can get those, then you are far less likely to see an increase in insurance premium.

Finally, I'm assuming it's on runflats. Some people like runflats, some people don't. HJ himself reckons they are a lifesaver, especially if you get a puncture on the motorway. With normal tyres, you (or the AA patrolman) is changing a wheel with all that traffic. With runflats, you can get off the motorway (usually). You decide.

By way of an update - I have negotiated new rear Alloy Wheels at no cost so have some breathing space. It should never have got to this as a long standing customer with such a low mileage car still under warranty.