1. The connectivity between the PABX and router has to be digital: E1 as minimum.
2. AS5300 does not support any directly connected phones.
AS5300 does not support the following interfaces: FXO/FXS/E&M.
Look, can you guarantee that all 120 extensions will make calls simultaneously?
Instead of connecting 4E1 to AS5300 I will recommend you to deploy some sort of proportion between the number of extensions and tie-lines: in telephony world we used to use (3-7) to (1), but it is very customer specific.
Based on my experience for 120 extensions I would use 1 or maximum 3 E1s, once again very customer dependant proportion.
3. Yes, this is 4 E1 connected to PABX and the connectivity will be:
Physical RJ45, signalling and other settings follow up your country specification.