Akshay,
Good to see all your valuable inputs and efforts 
I totally agree to your point numbers 1 and 2.
As far point#3, I believe you will have to use "append" mode while uploading the modified custom rule set. This will "update" the custom rule set with the changes you have incorporated in it. Of course, "overwrite" will remove everything currently existing and replace it with the new one.
Regards