The 201 is a smaller car than the 124,, to put this into context with the current cars,, the 124 was an E class mid size car followed by the 210 and 211. The 201 was next the 202, and then the 203 and now the 204, al the smaller cars in the range.
The largest are the S class, and started with the 126,next the 140 and then the 220 and 221
Once when I needed to change the roof pan on my old 230e I picked up a pan from a breakers in Sydenham area only to find ,the next weekend when the roof lining was removed etc. etc., that he had given me a the roof pan from a 190e. My point is that every nut,bolt and screw is different although from a distance both models look similar.
Mercedes spent a lot of time on the design of the W201 which was their first "compact saloon" destined to wrest back the younger customers wooed away by the sporty BMW 3 Series. Such was the integrity of the design, in particular the new suspension with its strut based front suspension, and novel 5 multi-link rear suspension, it was used for the younger W124 series. The W124 body monocoque with the integral engine cross member and Y shaped box sections to feed collision loads into the main structure was the same and the separate flexibly mounted subframe carrying the differential and rear suspension also follow the W201 design. So the answer is YES the W124 is indeed a scaled up version of the W201. Where it departs from the W201 is that the W124 went on to further body derivatives of estate,2 door Coupe and Cabriolet while the W201 remained a 4 door saloon.
For me the W124 is a much better car. Better ride, more space, better quality interior etc. If you get a 4 cylinder W124, then economy is quite similar to a 2 litre W201 as well.
On the other hand. Where handling comes into it, the W201 is more nimble, and certainly a sharper drive. There are plenty around with manual gearboxes too if thats your thing. Parts and running costs will be a bit cheaper, and there is a big aftermarket, errr, market for the 190.
Its still no sports saloon (unless you go for a 16valve) though. Brakes will fade very quickly and auto boxes sap the grunt.
Both cars have impeccable records of reliability, even with shocking neglect. They can both be had in good condition for less than a grand. And they hail from the happy period in Mercedes history where the engineers, rather than accountants, decided how the car was built.