I'm interested in what is required to convert a B5 from me5 to me7.

You will have to make a lot of changes to the interior harness as well. The cleanest way would be to swap the interior harness, but if you're good with diagrams you'll make it work.

I have planned a harness conversion in the past for a M383 (almost equal to M592) to ME7xx. With the right parts and tools it can be done, but needs some patience and knowledge to do it. Take a look of my conversion sheet --> http://www.mediafire.com/download/gc9asb7xbc889rf/M383_to_ME7_ECU_Harness_Conversion.xls .
Anyway the cleanest and trouble free way is to change engine and accesories harness that runs from the bottom right side behind the windshield (connection box) just in front of the driver to the engine bay. Then you will need ECU, maybe a new alternator (different connector, depends of the year/model of the part), maybe a new starter (different connector, depends of the year/model of the part), sensors, injectors, TB, clutch and brake pedal switchs and accelerator pedal.

I swapped a DBW 1.8t into my '99.5 2.8 and you definitely don't need to swap over the dash harness. Apart from some connector re-pinning you need to make a small harness for the pedal and cruise control, and you need to tap into a switched 12v source (I used one from the ABS circuit because that's how it was done in '01). You can also keep the stock cluster, but you'll have to make a couple of small changes to your engine harness (switch some pins, run a wire or two). The most difficult part of the swap for me was doing all the research and swapping the pedal cluster.

This is what I have documented: https://dl.dropboxusercontent.com/u/63667361/AWM%20swap.zip I can't guarantee everything's 100% correct and nothing's missing, but I'll be able to answer any questions you have.