We present a nonperturbative dynamical study of η-meson and pion production in heavy-ion collisions from 1 to 2 GeV/A bombarding energy. The dynamical evolution of the nucleus-nucleus collision is described by a transport equation of the Boltzmann-Uehling-Uhlenbeck type evolving phase-space distribution functions for nucleons, ∆'s, N(1440)'s, N(1535)'s, pions and η's with their isospin degrees of freedom. We also study the effect of pion and ∆ selfenergies on the pion dynamics. Though quite substantial medium modifications are incorporated, the pion spectra and yields show only a weak sensitivity on the in-medium effects. Furthermore, we present results for differential dilepton yields in heavy-ion collisions at bombarding energies of 1 and 2 GeV/A incorporating all known sources for dilepton production. We investigate in particular the sensitivity of the calculated yields to predicted changes of the ρ meson in dense matter and discuss the feasibility to measure the time-like electromagnetic form factor of hadrons and their medium-dependence through the observation of dileptons.