1)You are correct. Another option is load the PeopleSoft hierarchy and the DRM hierarchy into a database, then compare the two hierarchies to get the changes. Once you have the changes, you could load them into DRM. This option may not be that great if you have to perform the comparison on several hierarchies, but it is another option.
If you have Oracle/SqlServer in place a simple procedure will do the needful, you consider the whole extract you receive from PSFT onto a table ( Ex: STG_SOURCE) using External table concept and also maintain the same in a backup table (Ex:BKP_STG_SOURCE) after the first execution, from the next subsequent executions it will take care by comparing the BKP_STG_SOURCE and STG_SOURCE tables, which is a simple solution with which you can avoid creation of new versions ( from Import process) and blending the whole hiearchy on a daily basis will impact your system performance.