High combustion chamber temps promote excessive NOx production. ..
EGR reduces the high temps by putting a non flammable gas (exhaust) into the intake stream, reducing the amount of combustion heat created per ignition event.
Yep, that's right, it makes the individual event run rich.
The single best way I have found to minimize NOx output is to make sure the EGR system is in top shape, this often includes clearing out the EGR piping since it gets gradually clogged up with the particulates found in the exhaust stream.
I had a 2005 ML430 in the shop last week. .. here's a pic of what the EGR pipe looked like
As you can see, well. ............ there was a good reason it threw a CEL.
A heater element of the O2 sensor will enable it to respond sooner following a cold start since it doesn't function well until it gets up to temp, once the sensor is up to it's operating temp the ECM can do it's thing since it has assumed valid data.