Are the Germans far more willing to pay the reparations in this scenario seeing as they have vast territories to milk?
Yes, because their empire was mostly a money sink, and if the French can be forced to make peace in 1917, not by German arms, but by the return of A/L, and an end to the fighting, the sure.
How exactly Germans are supposed to hold Poland if they loose the war in the West?
They cannot loose the war in the West, else your correct that they would be disarmed. OTOH, if the Entente are forced to enter negotiations in April, 1917, with a treaty by Oct or so, else the USA starts calling in their loans, stops trading with them, and start trading with Germany instead...
Germany cannot win on the ground, in the west, in 1917 or 1918, so something else has to happen, so we can achieve the OP's conditions..
If France can regain A/L, through a peace treaty (because they have learned that in 3 years of fighting, they cannot take it in battle), and with the Germans loosing their colonies, but not their military, then France is getting their reparations, the "Lost Territories", and can call it good.