Upgrade wise, MP5's are a bit limited. Externally you can go a bit more crazy. a rail for optics and some sort of red dot sight would be the 1st thing I would do. The cheap flashlight hand guard's do the job, they aren't fancy but in CQB they will light up the dark spaces and dazzle your target a bit, they also have a pressure pad without all the ugly visible wiring that non-MP5 users tend to have. The downside if it's the same as mine, is that it comes with a thin glass lens. All I did was cut 3 circles the same size out of the packaging it came in and fitted them instead of the glass. It makes a loud bang when hit due to the air trapped between the layers but it survives the hit.
If you have a fixed stock and do CQB, consider a collapsible stock and wire it for a battery in the front handgrip.
You can get fancy rails etc. I tend to think the MP5 looks better without extra stuff strapped to it, the torch hand grip doesn't count as the torch is built into the hand guard.