Well, one reason why I don't think I will take it any further than the "copy2fs" mode (referred to here as RO Mode 1), is because I do sometimes want to run filetool.sh. For example, when I do put together a playlist, I like to login and just have to type a couple of commands to ensure this new playlist is saved to the SD, and then I reboot.
I am also not worried about a power failure during boot... I don't know, I just feel like that is one very unlucky situation that one would have to encounter.
So I think I will stick with what I have setup for now... and do a backup of the entire SD card once in a while. By the way, this can simply be done with "dd" on another machine, correct?