Got a response in SR on my above approaches: "No information on date w.r.t Approach3. Approach2 is more suitable than Approach1".
I believe Approach1 is NOT at all possible, and hence raised this in Community and SR. If it is possible at all, its obviously better than Approach2, as its a single step Upgrade.
Request Upgrade experts to share their opinion.
Got clarification from Oracle analyst. Approach2 is the Only option as of today. Thanks very much to Oracle Engineer's comprehensive call and concluding this.
Closing this thread.