Correct. If you know the package list that applies to the new version, with required changes, then the firmware builder can be used. If you don't know, then just grab the latest base firmware, install it and use "System -> Software" to pick through and install whatever top-level packages you need. See Detecting user installed pkgs for some tools to help dig out the list of top-level packages you've got installed.
Yeah, that's the big problem, it's hard to know what to rebuild, what got replaced, how to reconfigure...
And that's not just a problem you and I have, but also one that applies to auc/asu as well. There's currently no mechanism in place that says things like, "if you see package x getting upgraded from version 1 to version 2, then make sure to update the config to include the new fubar feature and delete the old barfu one" or "package A gets replaced by package B, but only if package X is present!" That info is probably in the release notes, but asu/auc can't read (yet 
) so it's left to use mere humans to do so.
The only reason item #1 in my list works so well is because the devs have made a concerted effort to never change basic structure in a given release (where "basic structure" could be viewed as library dependencies, package names and content, config file contents and meaning, stuff like that).
My best advice is "don't put off updates too long or it will become exponentially more painful with time."