As far as your options go:

1. You could try upgrading your machine directly, but I expect there will be dependency issues when you're done, although depending on the software you're using, they might not affect you.  If you try this, take a snapshot before you start so you can roll back the machine if you need to.

2. In general, no; the install scripts are intended to be run on fresh Ubuntu installs.

3. This is probably the safest option, but as you say, it will take a little time to build and then you will have to move your data across.  A shared (host-based) directory can help with this so you don't have to copy the data from one VM to another.